Oil futures edged lower as a series of recent market assessments suggest demand for crude is sputtering amid economic weakness.
Light, sweet crude for November delivery fell $1.40, or 1.5%, to $90.46 a barrel on the New York Mercantile Exchange. Brent crude on ICE Futures Europe fell 18 cents, or 0.2%, to $114.44 a barrel.
Friday, the International Energy Agency cut its 2012 oil demand growth forecast, saying it now expects oil demand to grow 700,000 barrels a day this year, as the weak global economy weighs on demand.
"We're hearing talk of weaker demand, and the IEA report was the latest," said Phil Flynn, analyst at Price Futures Group in Chicago.
The weakening demand picture comes as oil supply remains ample, despite recent sanctions on Iran. Oil production in the U.S. is at a record high, according to the Energy Information Administration. Saturday, the Organization of the Petroleum Exporting Countries said during a meeting with the International Monetary Fund that it expects the market to remain well supplied into next year.
Oil prices have been on a steady downward trend in recent months, as economic troubles in Europe and a tepid recovery in the U.S. curb demand for oil and refined products like gasoline. U.S. prices topped $100 in September, but they have fallen steadily since.
Underpinning prices, however, is the threat of supply disruptions due to intensifying unrest in the Middle East. Border skirmishes between Turkey and Syria in recent weeks have raised fears that the civil war in Syria is spreading to its neighbors, potentially disrupting key oil transit routes in Turkey or elsewhere.
"The threat of a spillover of the Syrian civil war into other countries in that region is now raising concerns," said analysts at Standard Bank in London. "The market's attention at present is captured by the escalating conflict between Syria and Turkey."
Meanwhile, the prospect of a conflict with Iran over its nuclear intentions continues to add a premium to oil prices. Over the weekend, the European Union gave its formal approval to a fresh package of sanctions against Iran, voicing "serious and deepening concerns" over Iran's nuclear program and the expansion of its uranium enrichment activity. The new penalties are the latest set of measures against Iran since the EU formally blocked Iranian oil imports in July.
Front-month November reformulated gasoline blendstock, or RBOB, recently fell 3.81 cents, or 1.3%, to $2.8547 a gallon. November heating oil fell 2.65 cents, or 0.8%, to $3.1974 a gallon.
Write to Dan Strumpf at dan.strumpf@dowjones.com.
