Demand growth weak and production on the rise

Geopolitics has lost its impact on the market and the fundamentals are bearish

Global oil demand growth has weakened and supplies continue to rise. Contango in the forward curve is persuading traders to buy now, too, pushing inventories higher. These are bearish fundamentals and the market has responded. Brent, trading at around $96 a barrel as Petroleum Economist went to press, is now $20 cheaper than it was in June. Sentiment in the market, not least sharp cut in long positions by speculators, suggests it could fall further. That old stalwart of the bulls, geopolitics - code for war in the Middle East - has lost its market force. Despite the terrorism plaguing northern Iraq, and renewed Western military engagement to repel it, exports from the big southern oilfields