Oil prices slump as energy watchdog drops demand forcecast

Investors, who piled into oil and other commodities earlier in the year as a hedge against inflation and the weak dollar, are now cashing out in search of safer havens Oil prices fell further today after the International Energy Agency cut its oil demand growth forecast for 2008 to the lowest rate in 15 years due to economic weakness and the banking crisis. Prices tumbled by almost $5 a barrel to a one-year low today amid growing fears that the deepening financial crisis will squash demand for fuel. In its monthly report, the IEA, adviser to 28 industrialised countries, reduced its demand growth forecast for this year by 250,000 barrels per day (bpd) to 440,000 bpd. This represents a 0.5% growth rate - the lowest in percentage terms since 1993. The report adds to evidence that slowing economies and the worsening financial... [read full story]