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<\/a><\/p>\nBy Shariq Khan<\/p>\n
BENGALURU (Reuters) -Oil prices fell a dollar a barrel on Thursday, as an OPEC report stoked summer demand worries and traders took profits after benchmarks scaled multi-month highs in the previous session.<\/p>\n
Brent crude fell $1.24, or 1.4%, to settle at $86.09 a barrel, only the second time this month that the global benchmark has finished lower. The U.S. West Texas Intermediate (WTI) slipped $1.10, or 1.3%, to close at $82.16 a barrel.<\/p>\n
Both benchmarks had gained 2% on Wednesday to their highest in more than a month, as cooling U.S. inflation spurred hopes that the U.S. Federal Reserve will stop raising interest rates.<\/p>\n
The Organization of the Petroleum Exporting Countries (OPEC) flagged downside risks to summer oil demand in a monthly report on Thursday, highlighting rising inventories and challenges to global growth.<\/p>\n
The report shed light on the reasons behind a surprise production cut announced by OPEC+, which includes Russia and other OPEC allies, at the start of this month.<\/p>\n
“Generally I would say we saw builds in oil inventories this week in those countries which publish stocks data, so maybe that is what has been a realization that the market hasn’t shifted into a deficit,” UBS analyst Giovanni Staunovo said.<\/p>\n
Despite Thursday’s declines, the OPEC+ decision has pushed Brent futures up nearly 8% so far this month, and it continues to raise expectations of potential future tightness in the oil markets.<\/p>\n
Oil price declines were also limited as OPEC kept its forecast for global oil demand growth in 2023 unchanged. Other economic indicators lent further support.<\/p>\n
The U.S. dollar index fell to a two-month low on Thursday after producer prices unexpectedly declined in March, boosting expectations that the Federal Reserve is near the end of its interest rate hiking cycle.<\/p>\n
A weaker greenback makes dollar-denominated oil cheaper for investors holding other currencies, lifting demand. <\/p>\n
“With the dollar at its weakest in a year versus the euro, that formula kicks in with an exclamation mark,” said Mizuho analyst Robert Yawger.<\/p>\n
Signs of a demand recovery in China, the top importer of crude oil and products, provided more support for oil prices, Yawger said.<\/p>\n
China’s crude oil imports in March surged 22.5% from a year earlier to the highest since June 2020, data showed on Thursday.<\/p>\n
(Reporting by Shariq Khan; Additional reporting by Rowena Edwards, Yuka Obayashi and Jeslyn Lerh; Editing by David Goodman, Will Dunham, Jane Merriman, Mark Heinrich and Mike Harrison)<\/p>\n
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