LONDON (MarketWatch) — Crude-oil futures extended losses in European trade on Friday, with the U.S. oil benchmark dipping below $59 a barrel after the International Energy Agency cut its outlook for global oil demand. On the New York Mercantile Exchange, light, sweet crude futures for delivery in January CLF5, -1.22% fell to $58.94 a barrel, before paring losses reach $59.26, a drop of $0.68, or 1.2%, and a more than five-year low. On Thursday, crude futures slipped below the key $60 level for the first time in five years. January Brent crude on London’s ICE Futures exchange LCOF5, -0.93% fell 40 cents to $63.28 a barrel on Friday. The losses deepened in European morning trade after the IEA cut its 2015 global oil-demand view by 230,000 barrels a day. Both WTI and Brent crude have now lost almost 45% of their value since June this year, in what market participants are now calling the “oil shock of 2014�. Oil prices have plummeted this year on the back of the U.S. shale boom, stagnating oil demand growth in Asia and Europe, and the reluctance of large Middle Eastern producers such as Saudi Arabia to intervene to cut the global supply glut. Read: Here is why oil has plunged below $59 Earlier this week, the Organization of the Petroleum Exporting Countries trimmed its forecast for demand for its oil by 300,000 barrels a day, to 28.9 million a day next year, compared with 29.4 million barrels a day in 2014. The U.S. Energy Information Administration also lowered its demand forecasts for 2015 in a report earlier this week. “A stronger U.S. dollar and ongoing concern over a projected 2015 surplus maintained a steady downward pressure on prices,� Citi Futures analyst Tim Evans said. Meanwhile, the impact of sinking oil prices is still reverberating though commodities and financial markets and the fallout is likely to carry over into 2015. Analysts continued to slash their oil-price forecasts. ANZ Research has cut its oil-price forecasts by an average of 24% in 2015 and now expects Nymex crude to average $68 a barrel, and Brent crude to average $71 a barrel, in 2015. “Investment funds have been quick to price-in the downside, with moves exacerbated by the end of U.S. quantitative easing and subsequent strength in the U.S. dollar,� ANZ’s commodity strategist Natalie Rampono said in a report. She said U.S. investors with bullish bets have already liquidated 42% of their positions since prices peaked in June. National Australia Bank has cut its price forecast for both oil and liquefied natural gas. It forecasts Brent crude to average $80 a barrel in the fourth quarter of 2014 and 2015. Nymex reformulated gasoline blendstock for January RBF5, -0.12% — the benchmark gasoline contract — was flat at $1.62 a gallon.

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