Shafaq News/ Oil prices edged loweron Tuesday, breaking a five-day streak of gains, as markets refocused onconcerns about demand after OPEC on Monday cut its forecast for demand growthin 2024 due to softer expectations in China.
Global benchmark Brent crude futuresfell 78 cents, or 0.95%, to $81.52 a barrel at 0330 GMT. US West TexasIntermediate crude futures slipped to $79.33 a barrel, down 73 cents, or 0.91%.
Brent had gained more than 3% onMonday, while US crude futures had risen more than 4%.
The Organization of the PetroleumExporting Countries' (OPEC) global demand forecast reduction for 2024highlighted the dilemma faced by the wider OPEC+ group in raising productionfrom October.
The cut to OPEC's 2024 forecast wasthe first since it was made in July 2023, and comes after mounting signs thatdemand in China has lagged expectations due to slumping diesel consumption andas a crisis in the property sector hampers the world's second-largest economy.
"Demand concerns for crude oilremain on the table," said Yeap Jun Rong, market strategist at IG, addingthat reservations lingered ahead of upcoming US inflation data.
"Any reflection of highereconomic risks could weigh on oil prices, at a time when OPEC+ has cut their2024 demand forecast and are set to roll back on their production cuts startingOctober, which may point to a less tight oil market ahead," Yeap said.
But he added investors remainedwatchful of the latest geopolitical tensions.
The Middle East conflict hasescalated, with the US preparing for what could be significant attacks by Iranor its proxies in the region as soon as this week, White House nationalsecurity spokesperson John Kirby said on Monday.
Any attack could tighten access toglobal crude supplies and boost prices. An assault could also lead the UnitedStates to place embargoes on Iranian crude exports, potentially affecting 1.5million barrels per day of supply, analysts said.
Markets are also preparing forWednesday's US consumer price index report that will give a crucial read oninflation, with investors now worried that an overly depressed CPI number willfan fears of a downturn.
Money markets have even bets on a25- or 50-basis-point cut in U.S. interest rates in September, expecting atotal easing of 100 bps by the end 2024, CME's FedWatch Tool showed.
Rate cuts tend to raise economicactivity, which increases the use of energy sources such as oil.
(Reuters)