Oil prices fell slightly early Thursday on expectations of higher global production and weak demand growth, while the rising dollar also weighed on prices.
Brent oil futures were down 6 cents, or 0.08%, at $72.22 a barrel by 0133 GMT. U.S. West Texas Intermediate (WTI) crude futures were down 13 cents, or 0.19%, at $68.30.
The U.S. Energy Information Administration slightly increased its forecast for U.S. oil production to an average of 13.23 million barrels per day this year, 300,000 bpd more than last year’s record of 12.93 million bpd, and up from the 13.22 million bpd forecast earlier.
The agency also raised its global oil production forecast for 2024 to 102.6 million bpd, up from 102.5 million bpd previously. For next year, it forecasts global production of 104.7 million bpd, compared to 104.5 million bpd previously.
The forecast comes after the Organization of the Petroleum Exporting Countries on Tuesday again reduced its forecast for global oil demand growth to 1.82 million bpd in 2024, down from 1.93 million bpd forecast last month. due to weak demand in China, India and other regions, which sent oil prices to their lowest level in almost two weeks.
The EIA forecasts lower oil demand growth than OPEC, at around 1 million bpd in 2024, although this is up from its previous forecast of around 900,000 bpd.
Market participants now await the International Energy Agency’s oil market report, due later today, and EIA data on U.S. crude and product inventories for further guidance commercial.
“The weak demand outlook in China continues to weigh on sentiment. The strengthening dollar creates headwinds for commodities,” ANZ Research said in a note.
The U.S. dollar rose to a seven-month high against major currencies on Wednesday after data showed U.S. inflation for October rose in line with expectations, suggesting the Federal Reserve will continue to cut interest rates.
A stronger dollar makes commodities priced in greenbacks more expensive for buyers using other currencies.
