Brent crude oil fell further on Thursday morning and traded at $108.68 at 9:28 GMT. The commodity faced pressure from waning global demand after the two largest consumers, the US and China, struggled with stalling growth.
China's central bank worried investors by making comments about stabilizing inflation expectations. The remarks sparked concern nation's pro-growth policy could be abandoned sooner than expected. Original forecasts for a hefty demand from the nation could be reduced as a result.
Also weighing on Brent prices is the US battle between Democrats and Republicans in Washington over the nation's deficit. President Barack Obama is proposing tax increases as part of his plan to reduce the nation's debt, but Republicans in the House of Representatives vehemently oppose this idea and the President has made little progress in gaining their support.
The International Energy Agency's monthly report showed that oil demand in 2013 was expected to drop. According to CNBC, the report reduced the IEA's demand growth forecast by 20,000 barrels per day to 820,000 barrels per day. Weak economic growth and higher oil prices were cited as the causes of the reduced forecast.
The report also showed that US crude inventories rose last week which has kept a ceiling over prices.
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Brent found some support in US February retail sales data, which rose at its fastest rate in five months. The data confirmed that the nation was well on its way to recovery; however it also lent strength to the dollar which neared a seven-month high on Thursday. The dollar's strength could make oil more costly for other currencies.
Moving forward, many are expecting to see Brent drop below $107.
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