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Oil extends losses as OPEC cuts demand growth forecast

World crude prices extended their losses Monday, pressured by persistent concerns about the global supply glut as OPEC lowered its demand growth forecast for next year.

US benchmark West Texas Intermediate for delivery in October dropped 63 cents to $ 44.00 a barrel on the New York Mercantile Exchange.

Brent North Sea crude for October, the global benchmark for crude oil, tumbled to $ 46.37 a barrel in London, down $ 1.77 from Friday’s settlement.

Both key contracts had fallen Friday, capping weekly losses of about three percent. Worries about the global oversupply, which has outpaced demand, have pushed crude prices down by more than half since June 2014.

On Monday, the Organization of the Petroleum Exporting Countries cut its forecast for global oil demand growth in 2016 as emerging markets, the motor of the world economy in recent years, struggle with slowing growth.

The cartel said demand would grow by 1.29 million barrels per day to 94.08 million barrels a day next year, 50,000 barrels less than its previous estimate.

The market also is focused on the Federal Reserve’s upcoming interest rate decision on Thursday, with speculation divided over whether the Federal Open Market Committee will hike the benchmark federal funds rate for the first time since 2006.

“The petroleum markets are testing the downside in Monday trade amid concerns over apparent slowing in China’s economy and uncertainty over whether the FOMC will opt to raise the fed funds rate this week,” said Tim Evans of Citi Futures.

Analysts say that a hike in the zero-level benchmark rate would likely push the dollar higher, making dollar-priced crude oil more expensive and potentially further damping demand.

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