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Oil falls as demand set to slow Oil falls as demand set to slow
(about 3 hours later)
The price of oil has fallen after the International Energy Agency predicted that the global recession would cut demand for crude this year. The price of oil has fallen sharply after the International Energy Agency predicted that the global recession would cut demand for crude this year.
The IEA said on Friday that world oil demand would fall by 2.4 million barrels a day to 83.4 million barrels.The IEA said on Friday that world oil demand would fall by 2.4 million barrels a day to 83.4 million barrels.
In Asian trading, US light crude fell 79 cents to $51.45 a barrel. London Brent oil was down 47 cents at $53.59. US light crude fell by $2.88 to $49.36 a barrel. London Brent oil was down by $2.44 at $51.62.
However, trading was light, with markets in London largely closed for the Easter holidays. Since hitting a record high of more than $147 a barrel in July last year, oil prices have slumped.
'Demand destruction''Demand destruction'
The Paris-based IEA said its forecast of lower oil demand was influenced by "a growing consensus that economic and oil demand recovery will be deferred to 2010".The Paris-based IEA said its forecast of lower oil demand was influenced by "a growing consensus that economic and oil demand recovery will be deferred to 2010".
It also noted that developed countries' oil inventories had risen in February to 61.6 days of forward cover, the highest since 1993.It also noted that developed countries' oil inventories had risen in February to 61.6 days of forward cover, the highest since 1993.
Victor Shum, an analyst in Singapore with the Pervin & Gertz consultancy, said the IEA's lower forecast represented "very serious demand destruction".Victor Shum, an analyst in Singapore with the Pervin & Gertz consultancy, said the IEA's lower forecast represented "very serious demand destruction".
"The macroeconomics don't look good at all for this year," he added."The macroeconomics don't look good at all for this year," he added.
Since hitting a record high of more than $147 a barrel in July last year, the price of oil has fallen dramatically. The price of oil dropped below $40 a barrel at the end of 2008 before recovering slightly, but remains nearly $100 below peak levels.
It dropped below $40 a barrel at the end of 2008 before recovering slightly, but remains nearly $100 below peak levels.