Oil prices have slipped after the Organization of the Petroleum Exporting Countries (OPEC) stated that fuel demand would fall more steeply than expected.
Brent crude futures were down by $0.08 to reach at $45.35 a barrel while the US West Texas Intermediate (WTI) futures fell by $0.04 to reach $42.62 a barrel, Reuters reported.
World oil demand is expected to decrease by 9.06Mbpd this year, the OPEC said in a monthly report.
The latest estimate is more than the 8.95Mbpd decline forecast a month ago.
Phillip Futures commodities senior manager Avtar Sandu was quoted by the news agency as saying: “OPEC released a bearish monthly forecast which indicated that world oil demand will fall more steeply in 2020 than previously forecasted due to the coronavirus and there are doubts about next year’s recovery.”
Data released by industry group Energy Information Administration (EIA) highlighted that the US fuel demand increased to 19.37Mbpd while crude output fell to 10.7Mbpd from 11Mbpd last week.
EIA data also showed a fall in the US crude oil, gasoline and distillate inventories last week.
According to EIA, the US crude oil production is forecast to decrease this year by 990,000bpd to 11.26Mbpd, a sharper decline than the 600,000bpd forecast last month.
However, uncertainty over a ‘stalemate’ in the US regarding a stimulus package to support recovery from the Covid-19 crisis might impact prices, according to analysts.