Petroleum prices dipped on Wednesday amid signs the United States, the world’s biggest oil producer, is at peak production, offsetting positive crude demand signals from top consumer China.
Brent futures were down 92 cents to $81.55 U.S. a barrel, while U.S. West Texas Intermediate crude was down $1.01 cents to $77.25.
China’s economic activity perked up in October as industrial output increased at a faster pace and retail sales growth beat expectations, an encouraging sign for the world’s second-largest economy.
The International Energy Agency joined the Organization of the Petroleum Exporting Countries and its allies in raising oil demand growth forecasts for this year, despite projections of slower economic growth in many major countries.
The U.S. Energy Information Administration will release its first oil inventory report in two weeks on Wednesday, after a delay last week due to a systems upgrade.
A softer U.S. inflation reading that bolstered expectations for an interest rate cut by the Federal Reserve next spring sent the U.S. dollar down to a two-and-a-half-month low against a basket of other currencies. A weaker dollar can boost oil demand by making crude cheaper for buyers using other currencies.
British inflation also cooled in October, and more than expected, reinforcing expectations that the Bank of England’s hiking cycle has ended, with the Federal Reserve and European Central Bank also seemingly having reached the peak for interest rates.
Elsewhere, the European Union reached a deal on Wednesday on a law to place methane emissions limits on Europe’s oil and gas imports from 2030, pressuring international suppliers to clamp down on leaks of the potent greenhouse gas.