Brent crude holds near $112
Brent crude futures steadied near $112 a barrel this morning as investors weighed a weaker demand outlook amid a sluggish global economy against the continuing potential for supply risks.
The global crude benchmark opened the fourth quarter lower on Monday as investors struggled to push prices higher in the face of poor manufacturing data out of Europe and China, and analysts expect further price weakness.
"I see continued downward pressure for oil. Supply will continue to chase demand, given the weak economic fundamentals overall," said Victor Shum, managing director for downstream energy consulting at IHS Purvin & Gertz.
"Geopolitics is still the wild card and could provide support or even spikes for prices in coming months," said Mr Shum, citing sustained tension between major oil producer Iran and the West over Tehran's disputed nuclear programme.
Iran-linked supply disruption worries, along with efforts by major central banks to spur economic activity via increased liquidity, pushed up Brent prices by 15 per cent over the third quarter, their best three-month showing in 1-1/2 years.
Brent crude for November delivery was off 12 cents at $112.07 a barrel by 04.21 GMT.
US crude slipped 17 cents to $92.31.