Oil futures fell on Wednesday as a gloomy economic outlook and a strong dollar outweighed supply concerns stemming from last week’s OPEC+ cut to its production target.
Brent crude futures were down $1.42, or 1.5 %, at $92.87 a barrel by 1315 GMT.
US West Texas Intermediate crude was down $1.54, or 1.7%, at $87.81.
OPEC, which together with allies including Russia last week sent prices rising by agreeing to cut supply by 2 million barrels per day (bpd), slashed its demand outlook on Wednesday.
Citing the resurgence of China’s COVID-19 containment measures and high inflation, the producer group cut its outlook for growth this year by 460,000 bpd to 2.64 million bpd.
“The world economy has entered into a time of heightened uncertainty and rising challenges”, OPEC said in its monthly report.
Also on the supply side, Russia’s state-owned pipeline monopoly Transneft on Wednesday said it had received notice from Polish operator PERN about a leak on the Druzhba oil pipeline, Interfax reported.
Meanwhile, the US dollar hit a 24-year high against the yen on Wednesday on concerns about inflation and the pace of increases to US interest rates.
A stronger dollar makes dollar-denominated commodities more expensive for holders of other currencies and tends to weigh on oil and other risk assets, Reuters reported.
Pushing prices down further, the International Monetary Fund on Tuesday cut its global growth forecast for 2023 and warned of increasing risk of a global recession.
The US consumer prices report is due on Thursday.