Oil prices fell today as the International Energy Agency cut its energy demand forecast for 2009 because of the global economic downturn.
Prices also continued to fall from recent six-month peaks as yesterday's poor US retail sales data and weak equities poured cold water on hopes of a global economic recovery, analysts said.
New York's main futures contract, light sweet crude for delivery in June, lost 36 cents to $57.66 a barrel. London's Brent North Sea crude for June dropped 39 cents to $56.95.
The IEA forecast a drop in global oil demand to a 28-year low, saying optimism about an economic recovery was not reviving appetite for energy.
The agency further trimmed its forecast for 2009, which it estimated at 83.2 million barrels per day (bpd), 3% lower than last year, and the sharpest single year's fall since 1981, in its monthly oil market report. Last month, it had estimated 2009 demand at 83.4 million bpd.
'Forecast global oil demand for 2009 has been revised down slightly (since last month) following weaker-than-expected preliminary data in various regions' such as the US, China and Russia, the IEA said.
'Preliminary data for early 2009 suggest little upside for now in our demand assessment,' it added.
The IEA is the oil monitoring and policy arm of the Paris-based Organisation for Economic Cooperation and Development. New York crude struck a six-month high of $60.08 on Tuesday, boosted by hopes for recovery and a fall in the dollar that made dollar-priced crude cheaper for foreign buyers.
Prices had bounced higher in intra-day trade yesterday after the US government's Department of Energy (DoE) published its weekly oil inventories report. After nine consecutive weeks of increases, crude oil reserves declined by 4.7 million barrels last week, surprising most analysts who had expected another gain.
But oil prices finished lower last night after a sharp plunge on Wall Street as weaker-than-expected retail sales data signalled no relief for the recession-mired US economy.
Crude futures have slumped since striking record highs above $147 dollars last July as the worst global downturn in decades has undercut energy demand.
