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Oil prices fall as IEA lowers demand growth forecast

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(Globalpost/GlobalPost)

Global oil prices fell on Thursday after the International Energy Agency trimmed its forecast for world energy demand growth.

Brent North Sea crude for delivery in May dipped 43 cents to $105.36 per barrel in afternoon deals in London.

New York's main contract, West Texas Intermediate (WTI) light sweet crude for May shed 48 cents to $94.17 a barrel.

The Paris-based IEA forecast that global demand for oil would grow by 795,000 barrels per day to a total of 90.6 million barrels (mbpd) in 2013, an estimate that was just slightly lower than its previous outlook, as a decline in Europe partially offset growth elsewhere.

However, the energy watchdog cautioned in a monthly report that falling oil prices did not necessarily foreshadow a "bear market". It added that there were signs that some of the recent easing of upward price pressures could be relatively short lived.

The IEA report was published one day after the Organisation of Petroleum Exporting Countries (OPEC) also lowered its forecast.

"Crude futures are little changed but biased to the downside on both sides of the Atlantic ... after the IEA and OPEC both cut estimates for global oil demand growth," said Tradition Energy analyst Addison Armstrong on Thursday.

"The IEA said global oil demand will average 90.58 mbpd this year, down 45,000 bpd from its March forecast.

"Yesterday OPEC cut its forecast by 40,000 bpd from last month's estimate, to 89.66 mbpd."

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

The US Energy Information Administration released a report Wednesday that showed US crude reserves grew by 250,000 barrels in the week ending April 5.

The build pushed US commercial stocks to 388.9 million barrels, not far from the all-time record of 391.9 million barrels in July 1990.

However, the increase was far less than market expectations for a gain of 1.2 million barrels, according to analysts polled by Dow Jones Newswires.

Sucden analyst Myrto Sokou added Thursday 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-fall-iea-lowers-demand-growth-forecast