Airlines in play again "IMF report"
Oil falls towards $48, IMF cuts growth forecast
By Jane Merriman
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LONDON (Reuters) - Oil briefly dipped below $48 a barrel on Wednesday, after the International Monetary Fund cut its 2009 global growth forecast and said the world was in a severe recession.
U.S. crude for June delivery stood 34 cents lower at $48.21 a barrel at 1316 GMT (9:16 a.m. EDT), off a session low of $47.70 and a session high of $49.09.
London Brent crude fell 32 cents to $49.50 a barrel.
The IMF predicted in its latest World Economic Outlook that the global economy will shrink by 1.3 percent in 2009. In January, the organization forecast global growth of 0.5 percent this year.
Oil prices had earlier drawn some support from expectations of a recovery in economic growth in China, the world's second-biggest energy consumer.
China's central bank has predicted a recovery in economic growth this year, despite the country's gross domestic product slowing in the first quarter to 6.1 percent from a year earlier, the lowest rate on record.
Goldman Sachs has raised its forecast for China GDP growth this year to 8.3 percent from 6.0 percent.
Despite optimism about China, demand for oil remains weak, illustrated by the latest import data from Japan and South Korea.
"Arguably the biggest uncertainty in the oil market at the moment is the economy," Lawrence Eagles, oil analyst at JP Morgan said in a research note.
"But even assuming a tentative second-half 2009 recovery, some of the latest bleak demand data suggest that without a further OPEC cut, we may not see a significant stock draw until 4Q09."
The Organization of the Petroleum Exporting Countries is concerned about the oversupply, Libya's top oil official said. "We are worried about the overhang," Shokri Ghanem, chairman of Libya's National Oil Corp., told Reuters.
OPEC meets next on May 28.
Independent oil tanker owner Frontline has estimated oil companies are storing close to 100 million barrels of crude oil at sea -- the highest in recent times.
Oil has fallen around $100 a barrel since a record above $147 hit in July last year, but has risen more than 40 percent since mid-February, partly because of signs of compliance by OPEC members over agreed supply cuts.
Since then, it has traded in a narrow band, with few convincing signs of a recovery in demand, while stocks of oil are still rising.
Analysts polled by Reuters predict U.S. crude inventories will have risen last week for the seventh time in a row, with the stockpiles seen at their highest in nearly 19 years.
The Energy Information Administration data at 1530 BST (10:30 a.m. EDT) is expected to show a 2.6 million barrel increase in crude oil inventories last week to a near 19-year high.
Data from the American Petroleum Institute on Tuesday showed U.S. crude oil stocks fell unexpectedly by 1 million barrels last week to 370.2 million barrels.
(Additional reporting by Baizhen Chua in Singapore; editing by James Jukwey and Sue Thomas)