By V. Phani Kumar, MarketWatch
MADRID (MarketWatch) — Crude-oil prices fell over $1 in electronic trading Friday after the International Energy Agency cut its outlook for global oil demand, and risk-averse sentiment saw the dollar strengthen.
Extending losses seen in Asia, crude-oil futures for March delivery CL2H -1.38% fell $1.09, or 1%, to $98.74 a barrel.
The IEA cut its 2012 estimate for global oil demand to 800,000 barrels a day, versus a prior forecast of 1.1 million barrels a day, citing lower global growth projections. It noted global GDP growth is now forecast at 3.3% for 2012, from the 4% level assumed since September.
“A two-speed outlook prevails — with robust oil demand growth envisaged in the non-OECD, while demand continues to fall across most of the OECD,” the IEA said in its monthly oil market report.
Europe woes were also in play for oil, pushing investors away from perceived riskier assets. The front-month crude contract had risen $1.13 in the regular New York Mercantile Exchange session Thursday, driven by relief over news of an agreement among Greek political leaders to austerity measures.
But markets fell across Asia and Europe, and U.S. stock futures pointed to a lower open for Wall Street on Friday after European Union finance ministers set a series of conditions on Greece in order for the country to get its next tranche of aid.
Analysts highlighted the long-term economic impact from the sovereign-debt crisis.
“While it probably takes a certain chaotic, financial crisis [and] instability out of play, it seems to us as though it still extracts the same unavoidable tax on growth prospects,” said Timothy Evans, an analyst at Citi Futures Perspective.
“Oil traders remain reluctant to focus too much on the direct physical fundamentals of the market, but these continue to flash signs of weakness,” he said.
Among other energy products, March prices for gasoline RB2H -1.28% fell 1%, or 4 cents, to $2.98 a gallon, and March heating oil HO2H -0.61% fell 1 cent, or 0.4%, to $3.20 a gallon.
March natural-gas futures HO2H -0.61% gave up 0.4% to $2.47 per million British thermal units.
The U.S. dollar DXY +0.48% advanced against most of its major currency rivals Friday to recover some recent losses.
Meanwhile, Dow Jones Industrial Average DJIA +0.05% futures fell 57 points, or 0.4%, to 12,785.
Varahabhotla Phani Kumar is a reporter in MarketWatch's Hong Kong bureau.
