Crude oil prices went down on Wednesday amid global growth concerns in the face of surging prices for coal and gas, which are set to stoke inflation, reducing oil demand; however, both crude benchmarks traded above $80 per barrel for the third straight day.
At 1145 hours GMT, Brent, the international benchmark for two-thirds of the world’s oil, shed $0.74 (-0.89 percent) to reach $82.68 a barrel. Similarly, the US WTI reached $80.01 a barrel, down by $0.63 (+0.78 percent).
The price for Opec Basket was recorded at $82.53 a barrel with 1.19 percent increase, Arab Light was available at $81.87 a barrel with a 0.37 percent decrease, while the price of Russian Sokol jumped to $84.59 after gaining 1.88 percent.
According to experts, a strong US dollar, trading near a one-year high, also weighed on oil prices, as it makes oil more expensive for those holding other currencies. The International Monetary Fund on Tuesday cut its growth outlooks for the United States and other major economies on worries supply chain disruptions and cost pressures are holding back the global economic recovery from the coronavirus pandemic.
However, oil watchers are still focused on whether soaring gas and coal prices will lead to more demand for oil products for power generation.
In its monthly report published on Wednesday, the Organisation of the Petroleum Exporting Countries (OPEC) announced that it lowered the 2021 oil demand growth forecast to 5.82 million barrels per day (bpd) from 5.96 million bpd.
The OPEC kept 2022 oil demand growth unchanged at 4.15 million bpd. It sees rise in natural gas and thermal coal prices encouraging increased gas-to-oil switching. The organisation raises estimated demand for its crude in 2022 by 100,000 bpd to 28.8 million bpd. It says its output rose 490,000 bpd to 27.33 million bpd in September.