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NEW YORK - Oil fell over 2 per cent to below US$60 a barrel on Friday as the International Energy Agency reported a sharp rise in energy stocks in top consuming nations and forecast a decline in the world's need for Opec crude.
US crude settled down US$1.57
to US$59.59 a barrel while London Brent fell US$1.61 to US$59.71.
In the monthly IEA report, the advisor to 26 industrialized countries said stockpiles in OECD countries grew by 1.15 million barrels per day in the third quarter, the biggest third-quarter rise since 1991.
The IEA also said the world's demand for crude oil from Opec will fall by about 500,000 bpd due to growth in production from non-Opec nations -- a factor that could dull the impact of Opec's recent output cuts.
"There were a lot of negatives in the IEA report but the two that stand out were the Q3 oil stock build of 1.15 million barrels per day, the highest Q3 increase since 1991, and the call on Opec crude reduced by half a million bpd," said Nauman Barakat, senior vice president, Macquarie Futures USA.
Tempering the weakness in the market, the IEA added that world's thirst for oil will rise 2.4 million bpd in the last three months of this year from the third quarter, 400,000 bpd higher than forecast last month.
Friday's losses come after oil prices had rallied on Thursday, supported by Opec supply cuts that came into effect this month and a drop in fuel stocks last week in the United States, the world's top oil consumer.
Gulf members of Opec said on Wednesday they were fully committed to the 1.2 million bpd supply cut agreed from November, but said markets remained oversupplied for now.
The producer group next meets on Dec. 14, and some members have said they see scope for a further cut in supply then.
US weekly data showed a 2.7 million-barrel fall in distillate stocks, stirring concerns over heating fuel supplies as the northern hemisphere heads into winter.
Forecasters say the US Northeast, the biggest heating oil consuming region, will have either normal or colder-than-normal weather into January.
- REUTERS