Oil prices fell nearly 4 percent on Tuesday after the government forecast the world economic slowdown would shrink global oil consumption this year for the first time since the early 1980s.
Crude oil in New York trading fell $1.64, or 3.7 percent, to settle at $42.07 a barrel.
The Energy Information Administration said in its monthly energy outlook that it expected global oil demand to fall by 50,000 barrels a day in 2008 and 450,000 barrels a day in 2009 — marking the first time since 1983 that year-to-year world oil demand has dropped.
The lower forecast came as the agency revised its 2009 world growth estimate for gross domestic product to 0.5 percent, down from last month’s estimate of 1.8 percent. The agency estimates 2008 G.D.P. growth will end up at 2.7 percent.