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Brent oil falls below $80

Developing economies had been a major support for oil over the past decade, but demand is now failing to keep up with increasing supply from North American shale production.

London: Brent crude oil fell to a four-year low below $80 a barrel on Thursday after Chinese data showed a slowdown in activity last month in the world’s top energy consumer and Saudi Arabia was silent about a possible cut in production.

Developing economies had been a major support for oil over the past decade, but demand is now failing to keep up with increasing supply from North American shale production.

Brent crude for December, which expires on Thursday, was down by $1.51 at $78.87 a barrel by 1314GMT after falling to an intraday low of $78.71, its lowest since September 2010. US light crude was down 40 cents at $76.78 a barrel.

“There are not many bullish factors,” said Avtar Sandu, a senior manager for commodities at Phillip Futures.

Demand for oil from members of the Organisation of the Petroleum Exporting Countries (Opec) will drop to 29.2 million barrels per day (bpd) next year, almost one million bpd less than current output, the cartel forecast this week.

Opec members meet in Vienna on November 27, when they will consider how to respond to a 30 per cent fall in oil prices over the past five months. Some have said they want a cut in output.

Qatar expects to lower oil output to about 500,000 bpd by the end of November from 650,000 bpd at the end of October and from 800,000 a month before that, an industry source familiar with the matter said.

But the most powerful Opec member, Saudi Arabia, has refrained from backing a cut, prompting speculation that it is more concerned with keeping market share than supporting prices.

“We do not set the oil price. The market sets the prices,” Saudi Oil Minister Ali Al Naimi said on Wednesday.