Oil is hovering around $ 83 a barrel while inflation weighs on the United States

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Oil prices fell on Thursday as the market grappled with concerns about rising inflation in the US and after OPEC cut its oil demand forecast for 2021 due to high prices .

Brent crude oil futures fell 46 cents to $ 82.19 a barrel at 12:24 pm EDT (1724 GMT) after previously falling to $ 81.66. US West Texas Intermediate (WTI) futures fell 50 cents to $ 80.84 after hitting a session low of $ 80.20.

The Organization of Petroleum Exporting Countries (OPEC) said in a monthly report that it expects oil demand to average 99.49 million barrels per day (bpd) in the fourth quarter of 2021, down 330,000 bpd. compared to last month’s forecasts.

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

OPEC sees world consumption exceed the 100 million barrels per day mark in the third quarter of 2022, three months after last month’s forecast. The producer group cited uncertain demand trends as the main reason why it will not increase supply to meet the demands for more crude from the United States.

“Whether the recognition of higher prices affecting economic activity and demand will encourage the group to increase production more at an upcoming meeting is another matter, especially with some struggling to meet production targets as it stands. “said Craig Erlam, senior market analyst at OANDA.

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US consumer price inflation rose 6.2%, according to data released Wednesday, the fastest rate in 30 years, largely driven by higher energy prices, pushing the dollar higher. and dropping Brent and WTI crude oil by 2.5% and 3.3% respectively.

US President Joe Biden said he asked the National Economic Council to work to reduce energy costs and the Federal Trade Commission to reject market manipulation in the energy sector to reverse inflation.

Brent crude oil gained over 60% this year and hit a three-year high of $ 86.70 on October 30. 25. However, oil prices appear to be consolidating below $ 85 a barrel, Julius Baer’s chief economics Norbert Rucker said in a statement.

“We could be looking at the first signs of a fundamental transition to an easing market, not least because oil demand should only grow gradually as the US shale and the nation’s oil supply recover.”

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

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