IEA cut demand estimates by 210,000 barrels a day and said Libyan output will rebound to 600,000 barrels a day by year’s end. Brent oil rose in London on speculation that Europe’s debt problems will be resolved and after the U.S. said Iran was linked to a plot to kill the Saudi Arabian ambassador to Washington.

“The IEA lowered their demand expectations and said Libyan output is going to be better than expected,” said Matt Smith, a commodities analyst with Summit Energy Services Inc. in Louisville, Kentucky.

Oil for November delivery fell 24 cents, or 0.3 percent, to settle at $85.57 a barrel on the New York Mercantile Exchange, the first decline since Oct. 4. Futures have fallen 6.4 percent this year.

The IEA reduced its world demand forecast to 90.5 million barrels a day. That means consumption will increase by 1.3 million barrels a day, or 1.4 percent, from this year.

Reuters