BANGKOK Crude oil fell below $88 a barrel Wednesday, a day after the International Monetary Fund lowered its outlook for global growth.
Benchmark oil for May delivery was down 73 cents to $87.99 a barrel at late afternoon Bangkok time in electronic trading on the New York Mercantile Exchange. The contract rose 1 cent to settle at $88.72 per barrel on the Nymex on Tuesday.
Crude was down almost 3 percent Monday, part of a broad sell-off in commodities that included gold recording its biggest one-day drop in 30 years. Gold and industrial metals fell hard after China reported that economic growth slowed unexpectedly in the first three months of the year. The world's second-largest economy grew by 7.7 percent over a year earlier, slower than many forecasts.
On Tuesday, the IMF said it was lowering its outlook for world economic growth this year to 3.3 percent, down from its forecast in January of 3.5 percent. It expects U.S. economic growth of 1.9 percent this year, down from its January estimate of 2.1 percent. It expects that the combined economy of the 17 euro countries will shrink 0.3 percent in 2013.
Lorraine Tan, director at Standard & Poor's equity research in Singapore, said that a "pretty sluggish" global economic recovery, increasing energy production in the U.S. and slightly slower growth in China are putting pressure on oil prices.
"The drivers for oil prices to go higher aren't really there," she said.
Brent crude, which is used to price oil used by many U.S. refiners to make gasoline, fell 64 cents to $99.27 a barrel on the ICE Futures exchange in London.
In other futures trading on the Nymex:
- Wholesale gasoline fell 0.9 cent to $2.765 a gallon.
- Heating oil fell 3.1 cents to $2.776 a gallon.
- Natural gas rose 2.6 cents to $4.186 per 1,000 cubic feet.