NEW YORK: US oil prices fell slightly on Wednesday after the International Energy Agency said global energy demand would fall this year by the largest amount since 1982 under the weight of the economic crisis.
US crude fell 32 cents to $37.23 a barrel by 1800 GMT while London Brent rose 27 cents to $44.88. US crude has been running at a big discount to Brent due to a supply glut at the main US storage hub in Oklahoma.
US oil's losses came after the Paris-based IEA said in its monthly report that global oil demand would fall by 980,000 barrels per day (bpd) in 2009, a decline that would exceed its previous forecast for a 500,000 bpd contraction.
Oil prices have dropped about $110 a barrel since last July's peaks due to the global economic slowdown and its impact on consumer and business fuel consumption, raising alarms for OPEC member nations that have agreed to record output cuts to counter the weakness.
Oil's losses were tempered somewhat by a separate report from the US Energy Information Administration Wednesday showing gasoline inventories dropped last week by 2.6 million barrels - countering analyst expectations for a small build.
"People are still driving. Prices have come down and demand has been somewhat steady and kind of creeping back a little bit," said Tom Bentz, senior commodity analyst at BNP Paribas Commodity Futures in New York.
The EIA report also showed US crude oil supplies rose more than expected, building for the seventh week in a row as refiners slowed production rates.
Encouraging oil's losses Wednesday, data from China's General Administration of Customs showed January crude oil imports to the world's second-largest energy consumer had fallen by 8 per cent to the lowest level for 15 months.
Leading oil exporter Saudi Arabia said current oil prices were unjustified and unsustainable.
"If today's low prices continue long enough, they will sow the seeds for future price spikes and volatility," Saudi Oil Minister Ali al-Naimi said in Houston on Tuesday.
12 Feb 2009, 0105 hrs IST,
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