June 11, 2015 / 3:12 AM / 4 years ago

Oil prices fall as World Bank cuts economic growth outlook

* World Bank cuts world growth outlook to 2.8 pct from 3 pct

* But strong fuel demand, Canadian wildfires support U.S. crude

By Henning Gloystein

SINGAPORE, June 11 (Reuters) - Crude oil futures fell early on Thursday as the World Bank cut its global economic growth forecast, ending a two-day rally triggered by a sharp U.S. inventory drawdown.

In its twice-yearly Global Economic Prospects report, the World Bank predicted the global economy would expand 2.8 percent this year, below its 3 percent outlook in January, with India recording the biggest growth of major economies for the first time, ahead of slowing China.

Front-month Brent crude oil prices were down 25 cents at $65.45 a barrel by 0247 GMT. U.S. crude was 33 cents lower at $61.10 a barrel.

The drop in prices ended a two-day rally that had seen U.S. crude rise close to $62, a level it last climbed above in May this year. The gains were driven by a big U.S. stocks drawdown that boosted the outlook for summer fuel demand.

The U.S. Energy Information Administration (EIA) reported that crude oil stocks shrank by 6.8 million barrels last week, their largest drop in almost a year and four times more than forecast by analysts in a Reuters poll.

Prices in North America have been buoyed recently by high gasoline demand for road vehicles as well as low production in Canada as a result of wildfires.

“In Western Canada, crude oil inventories are at their lowest level since October as maintenance shutdowns and wildfires in northern Alberta take their toll on supply,” ANZ bank said.

The premium for turning U.S. crude into gasoline hit a 2-1/2 month peak on Wednesday as inventories tumbled from seasonal highs and the market anticipated demand growth from the peak summer season for road travel. (Editing by Himani Sarkar)

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