Slowdown to hit world oil demand

Oil prices recently hit a high of $112

The International Energy Agency (IEA) has cut its forecast for oil demand in 2008 on expectations of a global economic slowdown.

The IEA has cut its 2008 forecast by 310,000 barrels per day to 87.2 million barrels per day.

The revision came after new projections on slower worldwide economic growth by the International Monetary Fund.

But demand for oil, which hit a record above $112 on Wednesday, is still expected to be 1.5% higher than 2007.

On Friday, US light, sweet crude for May delivery rose 41 cents to $110.52 a barrel in Asian electronic trading.

It was the third month in a row that the Paris-based IEA - which advises leading industrialised nations on energy trends - had cut its forecast.

Falling demand for oil could lead to lower oil prices, but the IEA said global oil supply had shrunk by 100,000 barrels a day in March.