Brent crude futures dropped 35 cents, or 0.5%, to $71.93 a barrel and U.S. West Texas Intermediate crude futures tumbled 42 cents, or 0.6%, to $68.01
Oil prices slid in early trade on Thursday, reversing most of the previous session’s gains, weighed down by worries of higher global production amid slow demand growth, with a stronger dollar exacerbating the declines.
Brent crude futures dropped 35 cents, or 0.5%, to $71.93 a barrel by 0400 GMT. U.S. West Texas Intermediate crude futures tumbled 42 cents, or 0.6%, to $68.01.
Oil is tackling the weaker demand forecast narrative by OPEC, which deferred rolling back additional production for yet another month, fearing the adverse effect on prices, stated Phillip Nova’s senior market analyst Priyanka Sachdeva.
On Tuesday, the OPEC cut its global oil demand growth forecast to 1.82 million barrels per day in 2024, down from 1.93 million barrels per day forecast last month, on weak demand in China, India and other regions, sending oil prices to their lowest in almost two weeks.
Meanwhile, the U.S. Energy Information Administration (EIA) has slightly raised its expectation of U.S. oil output to an average 13.23 million bpd this year, or 300,000 bpd higher than last year’s record 12.93 million bpd, and up from 13.22 million bpd forecast earlier.
The agency also raised its global oil output forecast for 2024 to 102.6 million bpd, from its prior forecast of 102.5 million bpd. For next year, it expects world output of 104.7 million bpd, up from 104.5 million bpd previously.
The U.S. Energy Information Administration’s oil demand growth forecasts are weaker than OPEC’s, at about 1 million bpd in 2024, although that is up from its prior forecast of about 900,000 bpd.
Market participants are now waiting for the International Energy Agency’s (IEA) oil market report, due later in the day for further trading cues.
