Earlier in the day, brent crude oil for October delivery hit $97.10 a barrel, its meanest since April 18 last year, before clawing back some gains to trade at $97.34 a barrel by 0910 GMT, still down 70 cents from Wednesday. The oil benchmark lost $1.12 per barrel in the previous session. US crude oil, too, fell 60 cents to $91.07 a barrel.
Oil prices have been under pressure on expectations of a supply glut as,
according to the International Energy Agency (IEA), supplies by producers other than those in the Oil and Petroleum Exporting Counties could rise by 1.6 million barrels per day in 2014, and by another 1.3 million bpd next year, mainly due to a shale gas boom in the US. The Opec, too, forecasts a surplus of 1 million bpd in 2015 if group members retains output at current levels.
Moreover, the IEA said on Thursday slowing global economic growth, particularly in China and Europe, curbed oil demand, especially when supplies remain plentiful, driving down prices.
However, geo-political risks still persist, especially after the US announced that it would broaden its air strikes against Islamic militants into Syria as well, after hitting them in Iraq. The brent crude oil had exceeded $115 to hit a nine-month high in June as Islamist insurgents swept across northern Iraq, seizing some oilfields. However, prices have dropped by 15% since from their highs as apart from adequate supplies, apprehensions about disruptions in oil exports from Iraq abated significantly after the US air strikes checked militants advance.
Copper drops in UK
The three-month copper on the London Metal Exchange declined to its lowest since June 20 at $6,781.25 per tonne earlier in the session, before recovering to $6,793 by 0708 GMT, still down 1.1% from Wednesday. On the Shanghai Futures Exchange, the metal lost 1.4% to 48,190 yuan($7,862) a tonne on Thursday. Latest data that Chinas credit growth witnessed an abrupt slowdown in August reinforced fears about weak demand and hurt the prospects of copper.
On top of that, after four straight years of deficit, global refined copper market is expected to have a surplus of 405,000 tonnes this year.
Gold under pressure
Gold prices stayed around a three-month low on Thursday on apprehension of an early hike in the US interest rates and a stronger dollar. While analysts await the outcome of the next weeks US Federal Reserve policy meeting for greater clarity, some felt the central bank could raise the rates. Higher interest rates usually brings down fears of inflation and makes gold, a safe-haven asset as well as a hedge against price rise, less attractive for investors. In Delhi, gold prices lost R190 to close at R27,610 per ten gram. Spot gold dropped 0.1% to $1,247.10 an ounce by 0628 GMT, having lost 0.6% on Wednesday when it fell to a three-month low of $1,243.56.