Crude Oil Plunges 3.6%, Settles Below $58 After Weak IEA Forecast

(RTTNews) - U.S. crude oil plummeted over 3.6 percent to end at a fresh 5-year low Friday, on falling demand and oversupply concerns after the International Energy Agency triggered yet another collapse as it slashed the demand growth forecast for 2015, even as the dollar weakened against some major currencies.

Barely a couple of days after OPEC cut oil demand forecast, the International Energy Agency today slashed its global oil demand growth forecast for 2015 to 900,000 barrels per day, down 230,000 barrels per day from its previous forecast.

On Wednesday, the OPEC had said that it expects global demand for the cartel's crude in 2015 to fall to the lowest level in more than a decade.

Light Sweet Crude Oil futures for January delivery, the most actively traded contract, dropped $2.14 or 3.6 percent to close at $57.81 a barrel on the New York Mercantile Exchange Friday.

Crude prices for January delivery scaled a high of $ 59.57 a barrel intraday and a low of $57.34.

On Thursday, crude oil futures ended at $59.95 a barrel, down $0.99 or 1.6 percent, with the dollar strengthening against most major currencies amid some upbeat U.S. economic data.

Data from the U.S. Commerce Department on Thursday showed retail sales to have increased more than expected in November may have prevented a steeper decline. Earlier on Wednesday, a report from the U.S. Energy Information Administration showed crude stockpiles to have increased more than expected last week.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 88.32 on Friday, down from its previous close of 88.55 late Thursday in North American trade. The dollar scaled a high of 88.64 intraday and a low of 88.11.

The euro trended higher against the dollar at $1.2454 on Friday, as compared to its previous close of $1.2413 late Thursday in North American trade. The euro scaled a high of $1.2486 intraday and a low of $1.2385.

In economic news, data from the U.S. Labor Department showed producer prices to have declined 0.2 percent in November. Economists expected the index to decline 0.1 percent month-over-month in November.

A Thomson Reuters and the University of Michigan report showed the preliminary reading on the consumer sentiment index for December at 93.8, compared to the final November reading of 88.8. Economists expected the index to show a more modest increase of 89.5.

A report from China's National Bureau of Statistics showed industrial production to have advanced 7.2 percent in November from last year. This was the weakest growth in three months and slower than the 7.7 percent increase seen in October and 7.5 percent growth forecast by economists.

In economic news from eurozone, data from Eurostat showed eurozone industrial output to have edged up by a less than expected 0.1 percent October, after a revised 0.5 percent increase in the preceding month.

Elsewhere in Europe, the leading economic index in the UK declined for a second straight month in October, the Conference Board said Friday. The leading economic index dropped 0.3 percent in October, same as in the previous month, which was revised from 0.4 percent. In August, the index climbed 0.4 percent.