Dallas: Oil fell from a 30-month high after the International Monetary Fund cut its growth forecasts for the US and Japan, indicating high oil prices pose a risk to global economic expansion.
Crude tumbled as much as 1.1% as the IMF’s World Economic Outlook predicted higher oil prices and the pace of job gains will restrain the US economic recovery. Oil also fell after the African Union said Libyan leader Moammar Gadhafi agreed to a ceasefire plan.
IMF clearly engendered some downward price pressure across a number of financial markets, including crude oil, said Jason Schenker, president of Prestige Economics, an energy advisory firm in Austin, Texas. “We’re looking at pretty solid global growth, it’s just a deceleration of growth,” he said.
Oil for May delivery fell 69 cents, or 0.6%, to $112.10 per barrel at 10:50am on the New York Mercantile Exchange. Futures settled at $112.79 per barrel on 8 April, the highest closing price since 22 September, 2008. Prices have risen 32% in the past year.
Oil will rise 36% in 2011 to $107.16 per barrel, based on the average prices of UK Brent, Dubai and West Texas Intermediate crude, the IMF report showed.
Ayesha Daya in Dubai and Sandrine Rastello and Timothy R. Homan in Washington contributed to this story.