NEW YORK, N.Y. - The price of oil slid by nearly $1 a barrel Tuesday as the International Energy Agency raised its forecast for U.S. oil production while cutting its prediction for global crude demand.
Benchmark oil for June delivery dropped 96 cents to close at US$94.21 a barrel on the New York Mercantile Exchange. Oil has declined $2.41 a barrel over the last four trading sessions.
The loss came after the Paris-based IEA, which advises 28 countries about energy issues, said rising U.S oil output will be the key source of new supplies over the coming five-year period.
"The supply shock created by a surge in North American oil production will be as transformative to the market over the next five years as was the rise of Chinese demand over the last 15," the IEA said in its in its medium-term market report.
While noting risks such as the effects of the "Arab Spring" on investment and capacity growth in the North African and Middle East oil industries, the IEA said it expected "a more comfortable global oil supply/demand balance" in the next five years.
Also weighing on prices was the IEA's decision to trim its global demand forecast for every year between 2013 and 2017. The agency cut its 2013 outlook by 20,000 barrels a day.
Overall the IEA forecast global oil demand growth to rise by a total of 6.1 million barrels a day over the next five years, from 90.6 million barrels a day in 2013 to 96.7 million barrels a day in 2018.
"Growth will remain subdued in 2013, then gain momentum in 2014-15 on stronger economic expansion, and slow down again in 2016-18 on efficiency improvements and fuel switching," the IEA said.
Brent crude, a benchmark for many international oil varieties, fell 22 cents to end at $102.60 a barrel on the ICE Futures exchange in London.
In other energy futures trading on Nymex:
— Wholesale gasoline rose two cents to finish at $2.84 a gallon.
— Heating oil fell two cents to end at $2.87 a gallon.
— Natural gas rose 10 cents to finish at $4.03 per 1,000 cubic feet.
Pamela Sampson in Bangkok and Pablo Gorondi in Budapest contributed to this report.
(TSX:ECA, TSX:IMO, TSX:SU, TSX:HSE, NYSE:BP, NYSE:COP, NYSE:XOM, NYSE:CVX, TSX:CNQ, TSX:TLM, TSX:COS.UN, TSX:CVE)