Oil prices struggled to find their footing in early Asian trade on Thursday after a weakening global demand outlook depressed the market in the last session.
U.S. crude futures fell 7 cents to trade at $87.20 per barrel at 0012 GMT, while Brent crude futures fell 1 cent to trade at $92.44 per barrel.
Both OPEC and the U.S. Energy Department cut their demand outlooks.
OPEC on Wednesday cut its outlook for demand growth this year by between 460,000 bpd and 2.64 million bpd, citing the resurgence of China’s COVID-19 containment measures and high inflation.
The U.S. Energy Department lowered its expectations for both production and demand in the United States and globally. It now sees just a 0.9 percent increase in U.S. consumption in 2023, down from a previous forecast for a rise of 1.7 percent . Worldwide, the department sees consumption rising just 1.5 percent , down from a previous forecast for 2 percent growth.
Last week, together with allies including Russia, OPEC sent prices rising when it agreed to cut supply by 2 million barrels per day (bpd).
Worsening demand for crude oil is contributing to inventory builds. U.S. crude oil stockpiles rose by about 7.1 million barrels for the week ended Oct. 7, according to market sources citing API data.
The energy market is under pressure as well from the dollar, which has rallied broadly, including against low-yielding currencies like the yen. The Federal Reserve’s commitment to keep raising interest rates to stem high inflation has boosted yields, making the U.S. currency more attractive to foreign investors.