Oil resumes fall back to $91 on economy worries, supply glut

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LONDON (Reuters) - Brent oil fell to $91 a barrel on Thursday, heading back to over two year lows, as a supply glut and concerns about global growth have pushed it 20 percent down from its peak in June.

Brent for November delivery was down 34 cents at $91.04 by 1005 GMT (0605 EDT), having fallen to $90.98 minutes earlier. The front-month contract fell as low as $90.57 on Wednesday, the lowest since June 2012, before recovering to close at $91.38 - still down 73 cents.

U.S. November crude lost 3 cents to $87.27 after ending the previous session down $1.54. In the previous session, it hit its lowest level since April 2013 at $86.83.

">LONDON (Reuters) - Brent oil fell to $91 a barrel on Thursday, heading back to over two year lows, as a supply glut and concerns about global growth have pushed it 20 percent down from its peak in June"

Weak German economic data emphasized the cloudy economic outlook in the region.

German exports plunged in August by their largest amount since the height of the financial crisis and leading institutes slashed forecasts for growth, fuelling debate on whether Berlin is doing enough to prop up the domestic and European economies.

"Supply is strong, inventories are high and demand in Europe is terrible," said Michael Hewson, head analyst at CMC Markets.

Crude inventories soared a more-than-expected 5 million barrels in the week to Oct. 3, data from the U.S. Department of Energy's Energy Information Administration showed on Wednesday. A build of 1.5 million barrels had been forecast by analysts polled by Reuters.

Investors also watched the Middle East where Islamic State fighters on Wednesday launched a renewed assault on Kobani, close to the Syrian-Turkish border, as U.S. and coalition warplanes attacked IS targets in Syria.

Top diplomats from Iran, the European Union and the United States, including U.S. Secretary of State John Kerry, will meet in Vienna next week, to try to make progress toward a long-elusive deal to end a dispute over Tehran's nuclear program by a Nov. 24 deadline.

"The front-month contract fell as low as $90.57 on Wednesday, the lowest since June 2012, before recovering to close at $91.38 - still down 73 cents.U.S"

Softer domestic demand probably pulled down growth in China's imports, investment and retail sales to multi-month or multi-year lows in September, raising questions about whether policymakers should do more to fight the economic slowdown.

However there are signs that the slump in crude prices are tempting Chinese buyers to move heavily into the physical market.

A 20 percent drop in global oil prices has whetted top energy consumer China's appetite for crude with PetroChina snapping up more than 8 million barrels in just over a week.

(Additional reporting by Keith Wallis in Singapore, editing by William Hardy)

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