11 June 2015 – Crude oil futures fell early on Thursday as the World Bank cut its global economic growth forecast, ending a two-day rally triggered by a sharp US inventory draw-down.
In its twice-yearly Global Economic Prospects report, the World Bank predicted the global economy would expand 2.8% this year, below its 3% outlook in January, with India recording the biggest growth of major economies for the first time, ahead of slowing China.
Front-month Brent crude oil prices were down 25 cents at $65.45 a barrel early on Thursday. US crude was 33 cents lower at $61.10 a barrel.
The drop in prices ended a two-day rally that had seen US crude rise close to $62, a level it last climbed above in May this year. The gains were driven by a big US stocks drawdown that boosted the outlook for summer fuel demand.
The US Energy Information Administration reported that crude stocks shrank by 6.8 million barrels last week, their largest drop in almost a year and four times more than forecast by analysts in a Reuters poll.
Prices in North America have been buoyed recently by high gasoline demand for road vehicles as well as low production in Canada as a result of wildfires.
“In Western Canada, crude oil inventories are at their lowest level since October as maintenance shutdowns and wildfires in northern Alberta take their toll on supply,” ANZ bank said.
The premium for turning US crude into gasoline hit a more than two-month peak on Wednesday as inventories tumbled from seasonal highs and the market anticipated demand growth from the peak summer season for road travel.