Oil Slips for 3rd Day, IEA Cuts Demand Outlook

U.S. crude futures slipped in early Asian trade on Wednesday, declining for a third day after the International Energy Agency further cut its demand outlook for the fourth quarter and 2013 amid a rebound in oil exports from sanctions-hit Iran.

The U.S. benchmark fell 5 cents to $85.33 a barrel by 0028 GMT, after settling 19 cents down and touching an intraday low of $84.57, the lowest since Nov. 9. Brent crude ended 81 cents lower, sliding for a second day.

Iranian oil output rose in October after seven months of decline due to Western sanctions and its exports rebounded strongly as China and South Korea bought more oil, the West's energy watchdog said.

The IEA also cut estimates for global oil demand for the fourth quarter of 2012 by around 300,000 bpd, due to Hurricane Sandy. It forecast a demand increase of 670,000 bpd this year and 830,000 bpd in 2013 to 90.4 million bpd — 100,000 bpd lower than it assumed last month.

Nexen said its Buzzard oil field in the North Sea suffered a power outage on Sunday, halting production, but came back on stream Monday.

U.S. crude oil inventories were forecast to have risen last week while product stocks were seen falling as big East Coast refineries have yet to resume normal operations after disruptions caused by Hurricane Sandy, a preliminary Reuters poll of analysts showed.

Iran unveiled new missile and artillery systems on Tuesday, Iranian media reported, on the second day of large-scale military exercises which officials said were aimed at sending a warning to those threatening the Islamic Republic.

U.S. Treasury Secretary Timothy Geithner on Tuesday warned against extending all U.S. tax breaks to give Washington additional time to broker a deficit reduction deal, saying it would create more uncertainty in the markets.

Source Reuters

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