Oil prices fall after IMF lowers global growth forecast

PanARMENIAN.Net - The price of oil fell slightly Wednesday, Oct 9, a day after the International Monetary Fund lowered its forecast for global growth through the end of next year, the Associated Press reports.

Benchmark crude for November delivery fell 3 cents to $103.46 per barrel at midday Bangkok time in electronic trading on the New York Mercantile Exchange. The contract rose 46 cents to settle at $103.49 on the Nymex on Tuesday.

On Tuesday, the Washington-based International Monetary Fund said it was cutting its global economic growth forecasts for 2013-14, primarily due to slowing growth in China, India, Brazil and other developing countries.

Michael Hewson of CMC Markets said in an email commentary that oil prices, while posting gains Tuesday, "remain capped somewhat by concerns that a slowdown in emerging markets could well weigh on demand."

The IMF also warned that the U.S. would harm the world economy if it fails to raise its borrowing limit. If Congress doesn't raise the limit on the amount of money the country can borrow by Oct 17, the nation could face an unprecedented default on its debts.

"There has been little change in the focus on the oil front as the U.S. budget stand-off continues to put pressure on prices," Desmond Chua, market analyst at CMC Markets in Singapore, told AFP.

With the partial U.S. government shutdown entering its ninth day, President Barack Obama said Tuesday he would not give in to demands from Republicans to make cuts to his healthcare law before they agree to a new budget and raise the country's borrowing limit.

However, he did say he would accept a short-term deal to lift the debt ceiling and reopen the government -- a move that would effectively postpone the crisis for a number of weeks.

Failure to lift the ceiling by the Oct 17 deadline will mean the government is unable to pay its bills or service its debts, causing a default that analysts have warned could send the world economy back into recession.

Despite Obama's comments Chua said "investors are still well aware that a resolution still depends on the House (of Representatives), which remains deadlocked".

Brent, the benchmark for international crudes, fell 19 cents to $109.97 on the ICE Futures exchange in London.