Written by Arunima Kumar
BENGALURU (Reuters) – Oil prices eased on Tuesday after five straight gains, as markets refocused on concerns about demand after OPEC cut its forecast for demand growth in 2024 due to expected softening in China.
Benchmark futures were down 30 cents, or 0.36%, at $82.00 a barrel as of 0820 GMT. US West Texas Intermediate crude was down 29 cents, or 0.36%, at $79.77.
Brent on Monday gained more than 3% while futures rose more than 4% on expectations of an escalating conflict in the Middle East that could tighten global crude oil supplies.
A cut 2024 demand forecast from the Organization of the Petroleum Exporting Countries' (OPEC) highlighted the crisis facing the wider OPEC+ group as it aims to raise output from October.
“Any indication of higher economic risks could weigh on oil prices, at a time when OPEC+ has cut its demand forecast for 2024 and will go back to cutting production from October, which could point to a weaker oil market ahead,” it said. Yeap Jun Rong, market strategist at IG.
But he added that investors are keeping an eye on the latest geopolitical tensions.
The conflict in the Middle East has escalated, with the US preparing for what could be a significant attack on Iran or its proxies in the region as soon as this week, White House national security spokesman John Kirby (NYSE: ) said Monday.
Any attack could tighten access to global crude and drive up prices. The attack could also lead the United States to impose restrictions on Iranian crude exports, which could affect 1.5 million barrels per day of supply, analysts said.
“If Iran's retaliation finally enters the so-called proportional response zone, and is a major disappointment, then Brent holding its $80 handle may be a challenge,” said Harry Tchilinguirian, head of research at Onyx Capital Group.
Markets are also preparing for Wednesday's US consumer price index report which will provide key readings on inflation.
