Oil falls as IEA predicts demand growth will slow

Associated Press

BANGKOK (AP) — Oil prices swung between small gains and losses Wednesday after the IEA lowered its forecast for global energy demand.

Benchmark oil for December delivery was up 3 cents to $85.41 per barrel at midday Bangkok time in electronic trading on the New York Mercantile Exchange.

The price of oil fell slightly Tuesday after the International Energy Agency predicted demand will grow at a slower pace into next year because of the sluggish global economy. The contract fell 19 cents to end at $85.38 per barrel in New York.

The IEA lowered its forecast for fourth-quarter oil demand by 300,000 barrels per day to 90.1 million barrels. Meanwhile, global oil supplies increased 800,000 barrels per day to 90.9 million barrels per day in October, the agency said.

The IEA blamed the weak European economy and superstorm Sandy, which disrupted oil imports and gasoline deliveries on the U.S. East Coast. Analysts also said uncertainty over Greece's debt situation and the so-called fiscal cliff in the U.S. were weighing on future prospects for global oil demand.

The release of weekly U.S. supply data from the American Petroleum Institute and Department of Energy will be delayed by a day because of Monday's holiday, said oil analyst Stephen Schork, noting the seasonal drop in demand, which tends to weigh on prices.

"U.S. demand for crude oil tends to peak in early July and then ebb through early November, towards the end of the fall turnaround season," he said in an email commentary.

Brent crude, which is used to price international varieties of oil, fell 16 cents to $108.10 per barrel in London.

Among other energy futures on the New York Mercantile Exchange:

— Heating oil fell 0.1 cent to $2.96 per gallon.

— Gasoline futures rose 0.2 cents to $2.624 per gallon.

— Natural gas rose 1.9 cents to $3.758 per 1,000 cubic feet.