By Scott DiSavino
NEW YORK (Reuters) -Oil prices remained near their lowest levels in two weeks on Wednesday after falling about 7% over the past three days on forecasts for lower oil demand growth and reduced concerns that conflicts in the Middle East will disrupt supply.
futures fell 3 cents to settle at $74.22 a barrel, while U.S. West Texas Intermediate (WTI) crude fell 19 cents, or 0.3%, to settle at $70.39.
Both crude oil benchmarks closed at their lowest levels since October 2 for the second day in a row.
Earlier this week, crude oil prices fell in response to weaker demand prospects and a media report that Israel would not attack Iran’s nuclear and oil sites, easing fears of supply disruptions.
Iran is a member of the Organization of the Petroleum Exporting Countries (OPEC) and produced about 4.0 million barrels of oil per day (bpd) in 2023, according to data from the US Energy Information Administration (EIA).
Iran was on track to export about 1.5 million barrels per day in 2024, up from an estimated 1.4 million barrels per day in 2023, according to analysts and U.S. government reports.
Iran supports several groups fighting Israel, including Hezbollah in Lebanon, Hamas in Gaza and the Houthis in Yemen.
Concerns persist about an escalation of the conflict between Israel and the Iranian-backed militant group Hezbollah. Supply cuts by OPEC and its allies including Russia, a group known as OPEC+, will remain in place until December, when some members are scheduled to begin unwinding one layer of cuts.
On the demand side, OPEC and the International Energy Agency this week cut their forecasts for global oil demand growth through 2024, with China accounting for the bulk of the downgrades.
The IEA predicts that global oil demand will peak at less than 102 million barrels per day before 2030, then fall to 99 million barrels per day by 2035.
The fiscal stimulus measures announced in China have not provided much support to oil prices. China could raise another 6 trillion yuan ($850 billion) from special government bonds over three years to boost a sagging economy, local media reported.
Positive economic news from the US and Europe helped limit the decline in oil prices on Wednesday.
In Europe, the eurozone economy showed some signs of life, with a range of indicators pointing to tepid but still positive growth for a bloc that has been dodging a recession for more than a year.
U.S. import prices fell the most in nine months in September as the cost of energy products fell sharply, pointing to a favorable inflation outlook that keeps the Federal Reserve on track to keep cutting rates.
After aggressively raising rates in 2022 and 2023 to curb the rise in inflation, the Fed began cutting rates in September.
Lower interest rates lower financing costs, which can stimulate economic growth and oil demand.
OIL STORAGE DATA IN THE US
Weekly data on US oil storage will come later on Wednesday from the trade group American Petroleum Institute (API) and on Thursday from the EIA. The reports were delayed by a day due to America’s Indigenous Peoples Day on Monday.
Analysts forecast that U.S. energy companies added about 1.8 million barrels of crude oil to storage in the week ending Oct. 11. [EIA/S] [API/S]
If true, this would be the first time energy companies have increased inventories three weeks in a row since April, compared with a withdrawal of 4.5 million barrels in the same week last year and an average increase of 1.1 million barrels in the past five years. 2019-2023).
