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International oil prices fall as demand eases

International oil prices fall as demand eases

September 12th, 2011 in News

NEW YORK (AP) - Drivers and businesses will use a little less fuel than previously thought this year, and that hurt international crude prices on Monday.

Brent crude, which is used to price many international oil varieties, fell 52 cents to end at $112.25 a barrel in London.

Prices fell after the Organization of Petroleum Exporting Countries sharply cut its forecast for world oil demand, saying it saw slower economic growth "in almost every major economy."

The 12-nation group expects global oil consumption to average 88 million barrels a day in 2011, about 140,000 barrels a day fewer than it forecast earlier. Demand in 2012 is expected to average 89.3 million barrels per day, or 180,000 barrels fewer.

"The global economy is losing momentum," OPEC said in its monthly forecast for oil demand.

Overall global demand remains strong and consumption, even at slightly lower levels, could reach a record high this year. That could keep prices oil prices from tumbling.

Andrew Lebow, a senior vice president and oil broker at MF Global, noted that the growing energy needs of China, India and other developing nations will offset weak demand in the industrialized world.

"No one is predicting that oil demand will shrink," Lebow said.

Even with the drop in OPEC's forecast, the cartel still predicts that more oil will be consumed this year than ever before.

While the U.S., western Europe and Japan cut back on oil, China will expand consumption by 6 percent this year, followed by increases of more than 2 percent in Asia, Latin America and the Middle East, OPEC said.

In the U.S., benchmark West Texas Intermediate crude rose 95 cents to finish at $88.19 per barrel in New York.

Retail gasoline prices fell less than a penny to $3.649 per gallon, according to auto club AAA, Wright Express and Oil Price Information Service. A gallon of regular unleaded is 95 cents higher than it was the same time last year.

In other commodities trading, heating oil lost 3.83 cents to end at $2.9475 per gallon while gasoline futures fell 3.28 cents to $2.7382 per gallon. Natural gas fell 3 cents to finish at $3.885 per 1,000 cubic feet.