Oil falls on predicted US output

NEW YORK — The price of oil slid by nearly $1 a barrel Tuesday as the International Energy Agency raised its forecast for US oil production while cutting its prediction for global crude demand.

Benchmark oil for June delivery dropped 96 cents to close at $94.21 a barrel on the New York Mercantile Exchange.

Oil has declined $2.41 a barrel over the last four trading sessions.


The loss came after the Paris-based IEA, which advises 28 countries about energy issues, said rising US oil output will be the key source of new supplies over the coming five-year period.

Get Talking Points in your inbox:
An afternoon recap of the day’s most important business news, delivered weekdays.
Thank you for signing up! Sign up for more newsletters here

‘‘The supply shock created by a surge in North American oil production will be as transformative to the market over the next five years as was the rise of Chinese demand over the last 15,’’ the IEA said in its in its medium-term market report.

While noting risks such as the effects of the Arab Spring on investment and capacity growth in the North African and Middle East oil industries, the IEA said it expected ‘‘a more comfortable global oil supply/demand balance’’ in the next five years.

Also weighing on prices was the IEA’s decision to trim its global demand forecast for every year between 2013 and 2017.

The agency cut its 2013 outlook by 20,000 barrels a day.