Oil prices slip after IEA slashes

Oil prices fell on Tuesday after the International Energy Agency cut its global crude demand forecasts. New York's main contract, West Texas Intermediate crude for delivery in December, lost 19 cents from late Monday to settle at $85.38 a barrel. In London Brent North Sea crude for December fell 86 cents to $108.21 a barrel. "Oil prices on both the Brent and US measure have slid lower today after the IEA downgraded its forecasts for demand growth in the face of the continuing deterioration being seen in economic data seen across Europe," said CMC Markets analyst Michael Hewson. "The agency also cited an assumption that US inventories would continue to remain high due to the disruption caused by the recent bad weather in the US." The IEA -- which represents oil-consuming countries -- predicted that global demand will have increased by 670,000 barrels per day (bpd) in 2012 to 89.6 million bpd. This was 60,000 bpd less than projected a month ago. For 2013, the Paris-based IEA forecast a rise of consumption to 90.4 million bpd, 100,000 barrels less than the previous forecast. The agency said that the downward revisions were mainly owing to sluggish economies in developed countries and the knock-on effects of Hurricane Sandy which wreaked havoc on the US East Coast two weeks ago. Sandy was expected to have slashed US demand by 230,000 bpd in October, as people curtailed travel and product deliveries were disrupted. Meanwhile, European debt fears dogged the market amid elevated tensions between Greece's bailout lenders over how to help it avert a default. Despite recent losses, oil prices remain at elevated levels, and OPEC Secretary-General Abdullah El-Badri, speaking in London Tuesday, blamed speculators. "There is no shortage of oil anywhere in the world, stocks are very high (and) OPEC has strong spare capacities," El-Badri told delegates at the Oil & Money industry event. "The market is very well supplied. There is no doubt about it, so I don't understand why we have these high prices. Speculation is the problem. "Speculation is part of the market, you can't eliminate it. It's not in our interest to see the world economy damaged by high oil prices," he added. The 12-nation Organization of Petroleum Exporting Countries, which supplies about one third of global oil, will hold its next regular production meeting in Vienna on December 12.