Oil declined in New York after the International Energy Agency trimmed its 2011 global oil demand forecast for the first time as this year’s price rally begins to weigh on consumption. The Paris-based adviser reduced its estimate for worldwide fuel consumption by 190,000 barrels a day, or 0.2 percent, in its monthly market report today. Demand for gasoline in the U.S. will drop this year as prices at the pump compel motorists to drive less during the typical peak summer months, the IEA said. “High oil prices have finally begun to dent demand,” the agency said. “Four dollar a gallon is likely to yield an anemic U.S. driving season. This is the main change to our demand forecast - a weaker 2011 profile in North America.” Oil for June delivery on the New York Mercantile Exchange fell as much as $1.53, or 1.6 percent, to $96.68 a barrel and was at $97.23 at 9:29 a.m. London time. Brent oil for June settlement was down 67 cents at $111.90 a barrel on the ICE Futures Europe exchange in London. To contact the reporter on this story: Rachel Graham in London rgraham13@bloomberg.net To contact the editor responsible for this story: Stephen Voss at sev@bloomberg.net

Source