NYMEX crude oil down in Asia as Iraq cuts prices as OPEC wrangles

Investing.com - Crude oil prices fell early in Asia on Monday with the focus on a supply demand imbalance that has seen values fall steadily.

Markets in Japan are to remain closed for a national holiday. China's trade balance is scheduled with no release time available with exports seen up 11.8%, imports down 2.7% and a trade surplus of $41 billion seen.

On the New York Mercantile Exchange, crude oil for delivery in November traded at $84.73 a barrel, down 1.22%.

At the weekend, Iraq's State Oil Marketing Company cut the oil price of Basrah Light crude in November for Asian and European buyers by 65 cents to a discount of $2.50 a barrel below the Oman/Dubai benchmark for Asian customers and $4.75 below the Brent benchmark for European customers, exposing a rift in OPEC members approach to ample supply.

The Brent oil contract is down more than 22% from its mid-June peak and the U.S. benchmark is down more than 20%.

Last week, crude oil futures sold off sharply as concerns over the global economic outlook and ample supplies drove prices lower.

The International Monetary Fund cut its global economic growth forecasts for the third time this year on Tuesday and warned that the recovery remains weak and uneven.

The organization is now forecasting global economic growth of 3.3% this year, down from 3.4% in July and expects growth of 3.8% in 2015, compared to an earlier prediction of 4.0%.

Investor sentiment was also hit by fears that Germany, the euro zone’s largest economy is being dragged into a recession after recent data indicated unexpected weakness in manufacturing and exports.

Global supplies have far outpaced demand in recent months, sparking speculation among traders about whether the Organization of the Petroleum Exporting Countries would lower production to keep prices high.

A report last week showed OPEC oil output hit a two-year high of 31 million barrels per day in September.

Some market analysts believe that only a cut in output by the oil cartel will halt the decline in prices.

In the week ahead, investors will be awaiting U.S. data on retail sales and industrial production for fresh indications on the strength of the economic recovery. Tuesday’s ZEW report on German economic sentiment will also be closely watched.