Oil slipped to around $111 a barrel on Thursday, extending the previous day's $5 slide, after the International Energy Agency cut its global demand forecast and China raised banks' reserve requirements Brent crude fell $1.32 to $111.25 a barrel today, Thursday, adding to Wednesday's $5 drop, which was sparked by rising U.S. gasoline inventories and falling domestic demand for the fuel. U.S. crude lost $1.91 to reach $96.30. "We clearly have seen demand growth slowing compared to last year's level and we're seeing it very much concentrated where the price feed through is most direct, notably in North America in terms of gasoline," said David Fyfe, head of the International Energy Agency's(IEA) Oil Industry and Markets division. Trade remained choppy, with prices paring losses after a report showed U.S. initial jobless claims fell last week. Wednesday's tumble in prices drove oil volatility. Oil also fell after the Chinese tightening move, which comes despite initial signs of slowing in the economy. China is the world's second-largest oil consumer and the source of much of its demand growth. The IEA said gasoline demand could "disappoint" this year as gasoline near $4 a gallon at the pump prompts Americans to drive less. "It is becoming increasingly clear that the high price level is dampening gasoline demand," said analysts at Commerzbank in a report. There could be further losses ahead for crude, according to technical price charts. Brent could fall toward $105.21, according to Reuters analyst Wang Tao. It fell as low as $105.15 on May 6. "If you see it from a fundamental point of view, the price is still too expensive and far from an appropriate value," said Ken Hasegawa, a commodity derivatives manager at Japan's Newedge brokerage. Oil had staged a modest bounce earlier on Thursday, clawing back about $1, as investors focused on relatively strong demand growth in Asia. Implied oil demand in China, reached its third-highest level on record last month, but year-on-year growth slipped to 8.8 percent after six consecutive months of double-digit gains. Even after the latest decline, Brent crude is up 17 percent this year, having jumped to a 32-month high above $127 last month, driven in part by fighting in Libya and the loss of its crude exports.
