* EIA slashes demand forecast, IEA expects further cuts
* OPEC officials call for further cuts
(Updates prices)
NEW YORK, Nov 12 (Reuters) - Oil fell 5 percent to $56 a
barrel on Wednesday as the U.S. government hacked its global
demand growth forecast again due to the slumping global
economy.
OPEC officials, concerned about the oil's steep drop from
record highs over $147 a barrel per day (bpd) in July, said the
cartel could possibly decide by the end of the month to cut
production again to raise prices. []
U.S. crude <CLc1> fell $2.94 to $56.39 a barrel at 14:13
p.m. EST (1913 GMT), after touching $56.00 earlier. London
Brent crude <LCOc1> traded down $3.06 to $52.65 a barrel.
The U.S. Energy Information Administration chopped its 2009
output outlook by 740,000 bpd, with total demand expected to
average 85.93 million bpd next year compared with estimates of
85.89 million bpd for this year. []
Demand in the United States, the world's biggest consumer
of oil, was expected to fall by more than 1 million bpd for the
first time since 1980 this year, the EIA said.
Earlier, the International Energy Agency, which advises
many of the biggest economies on energy policy, said a slowing
world economy may force it to cut its oil demand forecast again
when it releases its latest monthly report on Thursday.
The economic crisis had already led the IEA, to cut its
assumption for 2008 world oil demand growth to the lowest rate
in 15 years at just 440,000 barrels per day.
"We are likely to cut demand ... because the IMF changed
its projections on the world economy very dramatically," Nobuo
Tanaka, head of the IEA, told Reuters.
The IEA comment reinforced fears among traders and analysts
that the ferocity of the recession sweeping through many of the
world's biggest economies has not yet been fully factored into
projections for oil demand.
U.S. stocks extended losses on Wednesday after U.S.
Treasury Secretary Henry Paulson said his department would
consider capital needs of non-bank financial institutions,
renewing concerns about the scope of problems in the U.S.
economy. [].
"Fear global recession is worsening day by day is driving
this market down," said Rob Laughlin, senior oil analyst at MF
Global. "Demand for oil is deteriorating week by week."
OPEC REDUCTION
OPEC President Chakib Khelil told Reuters on Wednesday that
OPEC may cut oil supplies again, possibly by the end of this
month if prices keep falling and the world economy weakens
further. []
"If the prices continue their decline, most probably OPEC
will have to take a further decision on a cut in supply,"
Khelil, who is also Algeria's energy and mines minister, told
Reuters in an interview in Algiers.
Kuwait's oil minister said oil markets are oversupplied and
OPEC would consider cutting output again if inventories
continued to rise.
"If there is a surplus in the market and unwanted stocks, I
think OPEC has the right to look into this matter seriously,"
Kuwait's Oil Minister Mohammad al-Olaim told reporters, when
asked if the producer group needed to cut output again.
Analysts polled by Reuters ahead of U.S. weekly inventory
data forecast crude oil stocks rose by 1.2 million barrels last
week, while distillate inventories were seen rising by 800,000
barrels. []
Analysts also forecast a 300,000 barrel rise in gasoline
stocks. The data will be released on Thursday, a day later than
usual due to the U.S. Veterans' Day holiday on Tuesday.
(Reporting by Matthew Robinson, Robert Gibbons, and Gene Ramos
in New York; Christopher Johnson and Barbara Lewis in London;
Sambit Mohanty in Singapore; Editing by Marguerita Choy)
