Oil fell 5 percent to $56 a barrel on Wednesday as the U.S. government cut its global demand growth forecast again due to the slumping global economy. OPEC officials said the organization could cut production by the end of November to raise prices, which have fallen from highs of $147. U.S. crude fell $2.94 to $56.39 a barrel at 14:13 p.m. EST, after touching $56.00 earlier. London Brent crude traded down $3.06 to $52.65 a barrel. The U.S. Energy Information Administration (EIA) cut its 2009 output outlook by 740,000 barrels per day (bpd), with total demand expected to average 85.93 million bpd next year compared with estimates of 85.89 million bpd for this year. Demand in the United States, the world's biggest oil consumer, is now expected to fall by more than 1 million bpd for the first time since 1980, the EIA said. Earlier, the International Energy Agency cut its assumption for 2008 world oil demand growth to the lowest rate in 15 years at just 440,000 barrels per day. Analysts polled by Reuters ahead of U.S. weekly inventory data forecast crude oil stocks rose by 1.2 million barrels last week, while distillate inventories were seen rising by 800,000 barrels. Analysts also forecast a 300,000 barrel rise in gasoline stocks. The data will be released on Thursday, a day later than usual due to the U.S. Veterans' Day holiday on Tuesday.
