Brent crude oil fell nearly $3 on Monday to slipped below $100 a barrel after investors pulled out of the commodities market. Brent traded at $99.55 on Tuesday morning at 6:00 GMT after weak data supported concern about diminishing global demand.
Data from China showing stunted economic growth in the number two oil consumer was unexpected and rattled markets. Economic growth in the first quarter of 2013 was just 7.7 percent, much lower than the forecast 8 percent and down from 7.9 percent in the final quarter of 2012. The news gave many reason to doubt China's recovery and sparked a sell off within the commodity market.
China's poor economic growth only added to growing downward pressure on Brent prices after three key organizations lowered their forecasts for global oil demand growth. The International Energy Agency, the US Energy Information Administration and the Organization of the Petroleum Exporting Countries all significantly decreased their expectations for global oil demand growth in 2013 last week.
Looking forward, investors will be watching to see how the controversial election results in Venezuela could affect Brent prices. After Nicolas Maduro was elected president of the world's fifth largest oil producer, contender Henrique Capriles called on his followers to protest the decision.
Many believe that global economic picture is bleak and see things slowing down even further over the next few weeks. Some analysts are expecting to see Brent sink further and trade as low as $85 a barrel in the second quarter of 2013.
Underpinning Brent prices could be Iran, which Bloomberg reported might call an emergency OPEC meeting to keep Brent prices from staying below $100.
(c) 2013 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Copyright Benzinga. All rights reserved.