Oil Falls Below $94 A Barrel on Demand Forecast


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

Benchmark oil for May delivery dropped $1.13 to finish at $93.51 a barrel on the New York Mercantile Exchange. It had gained about $2 a barrel in the first three days of the week.

Meanwhile, U.S. drivers are seeing the cheapest April gas prices since 2010 after the nationwide average fell for an eighth straight day to $3.56 a gallon.

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 earlier this week by OPEC, comprised of the world’s key oil exporters, and the U.S. Energy Department.

Brent crude, which sets the price of crude used by many U.S. refineries to make gasoline, fell $1.52 to end at $104.27 a barrel on the ICE Futures exchange in London.

Brent has dropped about 12 percent in the past two months amid Europe’s ongoing financial crisis, increased supplies and tepid forecasts for demand. That combined with a sharp drop in gasoline futures to push down pump prices in the U.S.

Gasoline futures fell three cents to finish at $2.83 a gallon Thursday, and are close to a three-month low.

At $3.56, the national average pump price for a gallon of regular is the lowest since Feb. 7. Drivers are paying, on average, 22 cents a gallon less than they did at the end of February. The price is 36 cents less than a year ago. The last time gas cost less on April 11 was 2010, when the average was $2.86 a gallon.

Natural gas rose five cents to end at $4.14 per 1,000 cubic feet, the highest close since Aug. 2, 2011.

The Energy Department’s Energy Information Administration reported Thursday that natural gas in storage shrank last week by 14 billion cubic feet to 1.673 trillion cubic feet. Overall supplies are now about four percent below the five-year average.

Heating oil lost five cents to finish at $2.90 per gallon.