Oil prices barely budge; lower World Bank forecast offsets dip in U.S. supplies

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The price of oil bounced around before finishing with a slight gain Wednesday. U.S. supplies declined more than expected, but a reduction in the World Bank’s estimate of global economic growth raised concerns about demand.

Benchmark West Texas Intermediate crude for July delivery rose five cents to US$104.40 a barrel on the New York Mercantile Exchange.

Brent crude, the benchmark for international varieties, gained 43 cents to US$109.95 a barrel on the ICE Futures exchange in London amid increased tensions in Iraq.

The U.S. Energy Department reported that oil supplies fell by 2.6 million barrels in the week ended June 6. Analysts had expected a decline of 1.2 million barrels, according to a survey of analysts by Platts, the energy information arm of McGraw-Hill Cos.

The World Bank downgraded its forecast for the global economy this year, citing a bitter American winter and the political crisis in Ukraine. It now estimates growth of 2.8 per cent, down from a previous estimate of 3.2 per cent.

Geopolitical risks for energy markets were reinforced by al-Qaida inspired militants overrunning much of the Iraqi city of Mosul on Tuesday. Mosul is in an area that is usually — though not currently — a major gateway for Iraqi oil.

In other energy futures trading on Nymex, wholesale gasoline rose three cents to US$3 a U.S. gallon (3.79 litres), heating oil added two cents to US$2.90 a gallon and natural gas slipped two cents to US$4.51 per 1,000 cubic feet.

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