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LONDON: Oil prices slipped on Wednesday as International Energy Agency (IEA) data showed demand in developed countries was forecast to flag this year as inflation remains persistent, according to Reuters.
Brent crude futures were down 54 cents or 0.6 percent at $81.84 a barrel at 2:40 p.m. Saudi time. US West Texas Intermediate crude futures fell 50 cents or 0.6 percent to $77.52 a barrel.
The IEA trimmed its forecast for 2024 oil demand growth on Wednesday by 140,000 barrels per day to 1.1 million bpd, largely citing weak demand in developed OECD nations.
Oil demand in those countries actually contracted in the first quarter of this year, the IEA added.
But lending some support to prices, US crude oil inventories fell by 3.10 million barrels in the week ended May 10, according to market sources citing American Petroleum Institute figures on Tuesday.
Refineries are increasing runs to meet increased fuel demand heading into the peak northern hemisphere summer driving season.
Gasoline inventories fell by 1.27 million barrels and distillates rose by 673,000 barrels.
US government inventory data is due later on Wednesday which is likely to also show a drop in crude stockpiles.
“Prices will remain range bound between $80-$90 through 2Q24,” said Macquarie global oil and gas strategist Vikas Dwivedi.
“After 2Q, we expect oil will become bearish as a result of non-OPEC supply growth, decreasing OPEC+ space capacity and softer-than-anticipated demand due to persistent inflation.”
US consumer price index data is also due on Wednesday and should give a clearer indication whether the Federal Reserve may cut interest rates later this year, which could spur the economy and boost fuel demand.
Oil prices also found support from a softer US dollar.
“US inflation data looks set to dominate market sentiment going forward, with the dollar heading lower for a third consecutive day today,” said chief market analyst at Scope Markets Joshua Mahony.
“The apparent optimism seen throughout markets does stand on somewhat unstable ground given concerns over the potential for stubbornly high inflation throughout much of this year.”