US benchmark West Texas Intermediate (WTI) for September delivery dipped to US$97.37 a barrel on the New York Mercantile Exchange. European benchmark Brent oil for delivery in September tumbled to US$103.02 a barrel. Oil prices dropped on Tuesday with the main European benchmark contract sinking to a 13-month low after the International Energy Agency slashed its demand outlook for 2014 and 2015.
Pointing to slower global economic growth, the IEA projected 2014 oil demand would rise by 1 mln bpd to 92.7 mbd, compared to its July forecast for growth of 1.2 mbd. The IEA, the oil policy arm of the Organisation for Economic Cooperation and Development, also cut its 2015 demand forecast to 94 million barrels a day, 300,000 barrels less than the previous prediction. The IEA cited a "surprisingly steep" decline in oil demand in developed economies and described the market as generally flush with supply.