Analysts polled by Reuters ahead of US weekly inventory data forecast crude oil stocks rose 1.2 million barrels last week, while distillate and gasoline inventories were seen rising by 800,000 barrels and 300,000 barrels respectively. Oil has lost about $91, or 62 per cent, from its record high of above $147 struck in mid-July, on growing evidence that recent high energy prices and the financial crisis have dented energy demand in the United States and other industrialised nations.

Demand in the United States, the world's biggest consumer of oil, was expected to fall by more than 1 million barrels per day (bpd) for the first time since 1980 this year, the EIA said.

The EIA also forecast world oil demand to rise by only just 100,000 bpd in 2008 and will be virtually flat in 2009, as it cut its 2009 oil price forecast to average around $63.50 a barrel.

Analysts said a move by IEA to further cut its oil demand growth forecast later on Thursday could heighten fears among investors.

In the latest sign that China's economy is also being hit by the global downturn, data on Thursday showed Chinese annual industrial output slumped to 8.2 per cent in October, the weakest reading since late 2001, as manufacturers struggled with a drop in export demand and weakness in the domestic property market.

OPEC President Chakib Khelil said on Wednesday that Organization of Petroleum Exporting Countries may cut oil supplies again, possibly as early as at Nov. 29 meeting in Cairo, if prices keep falling and the world economy weakens.

... contd.