Oil prices crept toward $46 a barrel today in Asia after the US Energy department cut its 2009 crude demand forecast, stalling a two-week rally.
Benchmark crude for April delivery rose 2 cents to $45.73 a barrel by midday in Singapore on the New York Mercantile Exchange. Oil prices fell $1.36 yesterday to settle at $45.71.
The department's Energy Information Administration said yesterday it lowered its forecast for global oil demand for this year by 2,00,000 barrels a day from last month and now projects a decline of almost 1.4 million barrels a day in 2009. Its projection for global oil consumption this year is now 3 million barrels a day below its forecast from September.
The EIA report cut its estimate for the average oil price to $42 per barrel for 2009 and $53 in 2010 from $43 and $55 last month.
Today, the Paris-based International Energy Agency will release its forecast for global demand.
"The EIA report took the wind out of the sails of the rally and we saw people taking profits," said Gerard Rigby, an energy analyst at First Fuel Consulting in Sydney. "It highlighted the fact that products demand has been decreasing, not increasing."
Oil prices have risen from below $35 a barrel last month as US crude inventories fell two of the last three weeks.