IEA cuts forecast for oil demand

The slowing US economy is expected to cut the demand for oil

The International Energy Agency (IEA) has cut its forecast for global oil demand, due to slowing economies.

The IEA, which advises wealthy countries on energy policy, reduced its estimate for demand this year by 200,000 barrels per day.

It said an economic slowdown in the US, the world's biggest oil user, would take pressure off the market.

In a separate report, the US Energy Information Agency said US crude stocks rose last week, but less than forecast.

Oil prices have fallen 7% since hitting a record in early January.

The IEA thinks there is a chance of a prolonged weakness in the oil market.

"Just as the demand shock of 2004 shaped the oil market for the next three years, so too could the pending slowdown," the agency said.

The IEA report said the market can expect support from China where demand is forecast to jump 5.8% this year.