The International Monetary Fund cut its 2008 global growth forecast a day earlier, saying the world economy would expand by 3.7 per cent this year from a previous forecast of 4.1 per cent in January.

Average US oil demand over the first quarter of the year is down by more than 479,000 barrels-a-day compared with the previous year, according to a weekly Energy Information Administration (EIA) report.

West Texas Intermediate (WTI) crude traded at $104.90 on 3 April after hitting a record $111.80 a barrel on 17 March largely due to investors moving into commodities and away from the low US dollar.

Barclays Capital notes that the average price for crude oil in the first quarter of 2008 was $97.82 a barrel, the highest quarterly average on record and $39.60 a barrel higher than the corresponding period in 2007.

Barclays adds that a recent price poll highlighted that nine investment banks boosted their forecast for the WTI average in 2008 by at least $10 a barrel, with three banks increasing their forecasts by $20 a barrel or more.