Crude oil futures fell Tuesday after the Federal Reserve (Fed) Chairman Alan Greenspan played down oil effect on the economic growth.

On the New York Mercantile Exchange, light, sweet oil futures for May delivery dropped 97 cents to end at 56.04 dollars per barrel. Meanwhile, on London's International Petroleum Exchange the May Brent crude-oil futures contract fell 79 cents to close at 55.44 dollars a barrel.

Speaking to a group of US petrochemical producers, Greenspan said that more refining capacity was needed around the world, but that energy demand was already starting to soften, a trend that could help bring prices down.

The European Commission lowered its 2005 growth forecast Monday for the second time in six months. Growth in Europe would slow to 1.6 percent this year, less than the 2 percent predicted in October.

But many analysts remained cautious about the oil trend. They agreed that slow economic growth in Europe would ease demand for crude oil, pushing prices downward. Europe, however, was only one component of the world market. The oil market had always been US-centric, and US demand appeared to be still going strong.

The Organization of Petroleum Exporting Countries (OPEC) had promised to raise output targets to meet demand, but some analysts played down the significance of OPEC's move.

Source: Xinhua