Oil prices fall again on global growth worries

Oil prices dropped again Wednesday on rising fears that slowing economic growth will hit petroleum demand and further glut the market.

US benchmark West Texas Intermediate for November delivery dipped six cents to $81.78 a barrel on the New York Mercantile Exchange, the lowest closing price since late June 2012.

European benchmark Brent oil for November delivery dropped $1.22 to $83.78 a barrel in London.

The losses were modest compared with Tuesday's sell-off, when WTI dropped nearly five percent after the International Energy Agency slashed its global oil demand forecast.

But the extended losses showed "sentiment is bearish to say the least," said Andy Lebow, senior vice president of energy derivatives at Jefferies Bache.

"The supply and demand balance is clearly bearish," he said.

Lebow said there was no major petroleum-specific news Wednesday, but that the oil market took its cues from the equity market, which suffered deep losses on concerns about global growth.

US oil prices have dropped about 24 percent since mid-June.

In recent days, the oil market dropped further as the European and Chinese growth outlook darkened and as Saudi Arabia and others in OPEC have signaled that they will keep production high in spite of the pullback in prices.

"The market remains focused on the prospect of OPEC cartel members chasing market share with discounts, at a time when the market was expecting them to rein in production to support prices instead," said Matt Smith, analyst at Schneider Electric.