Oil prices tank after growth downgrades

Oil prices tanked Wednesday after 2013 growth forecasts were cut for the global economy and for China, stoking concerns about energy demand. New York's main contract, West Texas Intermediate light sweet crude for July, closed at $93.13 a barrel, down a hefty $1.88 from Tuesday. Brent North Sea crude for delivery in July dropped $1.80 to $102.43 a barrel in London trade. Sentiment took a hit after the OECD lowered its global growth forecast to 3.1 percent, from 3.4 percent, and the International Monetary Fund trimmed its estimate for China, to about 7.75 percent from 8.0 percent. Bart Melek of TD Securities said the pessimistic global outlook led the market lower. Melek also pointed to market concerns that the Federal Reserve would begin to reduce its $85 billion a month asset-purchase program after recent positive indicators indicating resilience in the US economy. Jason Hughes, head of CMC Markets, said there was some profit taking after an oil price run-up. "Dealers are taking some risks off the table ahead of US inventory data" due on Thursday, he said. The US Department of Energy is set to release its weekly oil inventories data a day later than usual due to Monday's public holiday. Markets also will be watching Thursday's release of the latest estimate of first-quarter gross domestic product growth in the United States to gauge potential demand for oil. The US government is expected to hold unchanged its initial estimate of an annualized rate of 2.5 percent.