Crude oil drops towards $48 after IMF cuts global growth forecast

Brent crude oil prices fell towards $48 a barrel on Tuesday after the International Monetary Fund cut its forecast for global economic growth in 2015 implying lower demand for fuel.



Global growth is projected at 3.5 per cent for 2015 and 3.7 per cent for 2016, the IMF said in its latest World Economic Outlook report, reducing its forecast by 0.3 percentage points for both years.



“New factors supporting growth – lower oil prices, but also depreciation of euro and yen – are more than offset by persistent negative forces,” said Olivier Blanchard, the IMF’s chief economist.



Brent crude traded around $48.44 a barrel by 0850 GMT, down 40 cents. US crude CLc1 was trading down $1.50 cents from Friday’s close at $47.19 a barrel. US markets were closed on Monday for a public holiday.



Oil prices have dropped by more than half since June as output has soared while demand growth has slowed.



Saudi Arabia and other members of the Organization of the Petroleum Exporting Countries (OPEC) have said they are leaving the oil market to find its own level and hope lower fuel prices will stimulate more demand in the long run.



Weak economic data from China on Tuesday further depressed oil markets.



The world’s second-largest economy and biggest energy consumer grew 7.4 per cent last year, China’s National Bureau of Statistics said, less than the target of 7.5 per cent and its weakest annual expansion in 24 years.



Growth in the fourth quarter held at its weakest in nearly six years, although coming in slightly better than expected at 7.3 per cent.

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