Oil slips again after IMF cuts global growth forecast

A woman walks past a construction site at the Central Business District of Beijing, China Tuesday, Jan. 20, 2015. AP

NEW YORK, United States – Crude oil prices slumped Tuesday after the International Monetary Fund (IMF) slashed its world economic growth forecast, stoking fresh fears about the strength of crude demand.

US benchmark West Texas Intermediate (WTI) for February sank $2.30, or 4.7 percent, to $46.39 a barrel, not far from its lowest level since March 2009.

Brent North Sea crude for delivery in March, the international benchmark, dropped to $47.99 a barrel in London, down 85 cents from Monday’s closing level.

“Crude oil prices remain under heavy pressure with WTI front-month futures retreating… following news that the IMF cut its global growth forecast by (the) most in three years,” said Sucden analyst Myrto Sokou.

The IMF reduced its global economic growth forecast for this year to 3.5 percent and 3.7 percent in 2017 on the back of weaker momentum in nearly all major economies except the United States.

Both estimates were 0.3 percentage point lower than in its October forecast.

Moody’s meanwhile lowered its 2015 average price estimates to $55 a barrel for Brent and $52 for WTI. It projected both contracts would rise in 2016, to $65 and  $62, respectively.

“We see no near-term catalysts that would change the supply/demand equation,” credit ratings firm Moody’s said in a market note.

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