16 May 2009

Gloomy energy demand forecasts hit oil market

7:43 am on 16 May 2009

The price of oil has fallen nearly 4% because of an increasingly pessimistic outlook for global energy demand.

US crude for June delivery fell $US2.28 to settle at $US56.34 per barrel. It is down from a six-month high of more than $US60 hit earlier this week.

London Brent for July fell $US2.61 to $US55.98 per barrel.

The losses came after the International Energy Agency, the Energy Information Administration and OPEC this week downgraded their forecasts for global energy demand in 2009.

World energy use has been shrinking because of the global economic recession for the first time in a quarter of a century.

The IEA says the decline in oil consumption in 2009 would be the steepest since 1981.