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Oil prices drop on demand worries

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(Globalpost/GlobalPost)

Global oil prices dived Thursday on concerns about weakening global demand after the IEA lowered its 2013 consumption forecast.

New York's main contract, West Texas Intermediate (WTI) for May delivery, closed at $93.51 a barrel, a loss of $1.13.

In London trade, Brent North Sea crude for delivery in May dropped $1.52 to settle at $104.27 a barrel.

"The latest monthly report from the IEA falls in line with reports released in recent days by OPEC and the EIA by showing a marginal downward revision to oil demand growth for this year," said Matt Smith of Schneider Electric.

The International Energy Agency projected global oil demand for oil would grow by 795,000 barrels per day to a total of 90.6 million barrels a day in 2013, slightly lower than its previous outlook, as a decline in Europe partially offset growth elsewhere.

On Wednesday, the Organisation of Petroleum Exporting Countries (OPEC) also lowered its forecast.

US oil prices had rallied on Wednesday after the US Energy Information Administration report showed a smaller-than-expected increase in oil stocks in top consumer the United States.

The EIA said US crude reserves grew by 250,000 barrels in the week ending April 5, pushing US commercial stocks to 388.9 million barrels, not far from the all-time record of 391.9 million barrels in July 1990.

Sucden analyst Myrto Sokou said that the oil market was hit this week by "renewed concerns about oil consumption".

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http://www.globalpost.com/dispatch/news/afp/130411/oil-prices-drop-demand-worries