LONDON: Oil fell below $115 a barrel on Friday, as a prediction of a further decline in oil consumption and higher supplies offset concerns about potential output disruptions in the Middle East.
The International Energy Agency (IEA) said ample supply from North America and Iraq coupled with declining global demand could lead to an easing of oil prices over the next five years.
Brent crude had fallen $1.18 to $114.53 a barrel by 0924 GMT. US crude was down 26 cents at $91.81.
The IEA cut its global oil demand growth projection for 2011-2016 by 500,000 barrels per day (bpd) compared to its previous report, easing the pressure on OPEC to produce more oil.
It also cut its 2013 global oil demand projection by 100,000 bpd to 90.48 million bpd, citing lower consumption in Europe, the Americas and China.
"It seems like the market has reacted on the negative side. Crude oil prices reversed from yesterday's gains amid concerns over confirmation of the global oil demand growth," said Myrto Sokou, a senior research analyst at Sucden Financial.
"The bearish IEA figures set the tone for the day so we can expect further declines for today's trading session," Sokou said.
Oil major BP Plc has secured US government permission to ship US crude oil to Canada, and Royal Dutch Shell has applied for an export license, as rising production in the world's top oil consumer upends global energy flows.
"This will significantly alter the oil market dynamics in the coming years as US crude imports are expected to decline and exports to rise," said Ryoma Furumi, a commodity sales manager at Newedge Japan.
"If exports start rolling out in full force, WTI could regain its ground against Brent."
But support for oil prices remains as more than a week of rising tension between Turkey and Syria has stoked fears over potential disruption of oil supply from the region. The port of Ceyhan, through which more than 400,000 barrels per day of Iraqi crude flows, is located on the Turkish Mediterranean.
Syria accused Turkey of "air piracy" on Thursday after Ankara grounded a Damascus-bound passenger plane it said was carrying munitions.
"Even though Syria and Turkey do not produce a lot of oil, market participants are worried that tensions could spread to some of the major producers," ANZ analysts said in a note.
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