Oil has fallen below $94 a barrel after the International Energy Agency lowered its forecast for global oil demand.

The benchmark oil contract for May delivery was down $1.18 to $93.46 a barrel in afternoon trading on the New York Mercantile Exchange.

The IEA, which represents some of the world's biggest oil-consuming nations, lowered its expectations for global oil demand in 2013 by 45,000 barrels, to 90.6 million barrels a day.

That is still 795,000 barrels a day more than in 2012.

"A weak macroeconomic environment is expected to keep demand growth relatively subdued for the remainder of the year," the Paris-based agency said.

Its predictions echoed those made yesterday by OPEC, comprised of the world's key oil exporters.

Brent crude, which sets the price of crude used by many US refineries to make gasoline, fell $1.40 to $104.38 a barrel on the ICE Futures exchange in London.

Brent has dropped about 11% in the past two months amid Europe's ongoing financial crisis, increased supplies and tepid forecasts for demand.

Along with a drop in wholesale gasoline futures, that's contributed to a sharp drop in US pump prices. Gasoline futures fell 4 cents to $2.83 a gallon, close to a three-month low.

Natural gas was up 1 cent to $4.10 per 1,000 cubic feet, after rising as high as $4.18.

The Energy Department's Energy Information Administration reported that natural gas in storage shrank last week by 14 billion cubic feet to 1.673 trillion cubic feet.

Overall supplies are now about 4% below the five-year average.