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InvestmentsOil hovers near $83 a barrel as U.S. inflation weighs By Reuters

Oil hovers near $83 a barrel as U.S. inflation weighs By Reuters

© Reuters. FILE PHOTO: Crude oil storage tanks are seen from above on the Cushing oil hub, in Cushing, Oklahoma, March 24, 2016. REUTERS/Nick Oxford

By Laura Sanicola

(Reuters) -Oil costs drifted decrease on Thursday, as the market grappled with concern over growing U.S. inflation, and after OPEC lower its 2021 oil demand forecast as a consequence of excessive costs.

futures had been down 46 cents to $82.19 a barrel by 12:24 p.m. EDT (1724 GMT) after falling earlier to $81.66. U.S. West Texas Intermediate (WTI) futures had been down 50 cents to $80.84 after hitting a session low of $80.20.

The Organization of the Petroleum Exporting Countries (OPEC) stated in a month-to-month report it expects oil demand to common 99.49 million barrels per day (bpd) within the fourth quarter of 2021, down 330,000 bpd from final month’s forecast.

“A slowdown in the pace of recovery in the fourth quarter of 2021 is now assumed due to elevated energy prices,” OPEC stated within the report, additionally citing slower-than-expected demand in China and India for the downward revision.

OPEC sees world consumption surpassing the 100 million bpd mark within the third quarter of 2022, three months later than forecast final month. The producer group has cited the unsure path for demand as a major purpose why it is not going to improve provide to fulfill requires extra crude from the United States.

“Whether the acknowledgement of higher prices affecting economic activity and demand will encourage the group to increase output more at an upcoming meeting is another thing, especially with some struggling to meet output targets as it is,” stated Craig Erlam, senior market analyst at OANDA.

U.S. shopper value inflation rose by 6.2%, in accordance with information launched Wednesday, the quickest fee in 30 years, pushed largely by steeper power costs, pushing the greenback greater and sending Brent and WTI crude down by 2.5% and three.3%, respectively.

U.S. President Joe Biden stated he requested the National Economic Council to work to scale back power prices and the Federal Trade Commission to push again on market manipulation within the power sector to reverse inflation.

Brent crude has gained greater than 60% this yr and hit a three-year excessive of $86.70 on Oct. 25. However, oil costs look like consolidating under $85 a barrel, Norbert Rucker, head of economics at Julius Baer, stated in a be aware.

“We could be looking at early signs of a fundamental transition towards an easing market, not least as oil demand should only grow gradually going forward with the pick-up in U.S. shale and petro-nation supply.”

(Additoinal reporting by Ron Bousso; Additional reporting by Jessica Jaganathan; Editing Steve Orlofsky and Bernadette Baum)

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