By Scott DiSavino
NEW YORK (Reuters) - Oil prices held near a two-week low on Wednesday after dropping about 7% over the prior three days on forecasts for less oil demand growth and an easing in worries that Middle East conflicts will result in supply disruptions.
Brent futures fell 13 cents, or 0.2%, to $74.12 a barrel by 11:58 a.m. EDT (1558 GMT), while U.S. West Texas Intermediate (WTI) crude fell 24 cents, or 0.3%, to $70.34.
"On the top of every ardent bear’s wish list are a stuttering Chinese economy, relative calm in the Near East and downward revisions in global oil demand growth. These wishes were granted at the beginning of the week," Tamas Varga, an analyst at TP ICAP (LON:NXGN)'s PVM brokerage unit said in a report.
Earlier this week, crude prices fell in response to a weaker demand outlook and a media report that Israel would not strike Iranian 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 per day (bpd) of oil in 2023, according to data from the U.S. Energy Information Administration (EIA).
Iran was on track to export around 1.5 million bpd in 2024, up from an estimated 1.4 million bpd in 2023, according to analysts and U.S. government reports.
Iran is backing several groups fighting Israel, including Hezbollah in Lebanon, Hamas in Gaza and the Houthis in Yemen.
Concern about an escalation in the conflict between Israel and Iran-backed militant group Hezbollah still persists. Supply curbs by OPEC and its allies including Russia, a group known as OPEC+, remain in place until December when some members are scheduled to start unwinding one layer of cuts.
On the demand side, OPEC and the International Energy Agency this week cut their 2024 global oil demand growth forecasts, with China accounting for the bulk of the downgrades.
The IEA forecast global oil demand would peak before 2030 at less than 102 million bpd and then fall to 99 million bpd by 2035.
Economic stimulus in China, meanwhile, has failed to give oil prices much support. China may raise an additional 6 trillion yuan ($850 billion) from special treasury bonds over three years to stimulate a sagging economy, local media reported.
U.S. OIL STORAGE DATA
Weekly U.S. oil storage data is due from the American Petroleum Institute (API) trade group later on Wednesday and the U.S. Energy Information Administration (EIA) on Thursday. The reports were delayed by one day for the U.S. Indigenous Peoples' Day holiday on Monday.
Analysts projected U.S. energy firms added about 1.8 million barrels of crude into storage during the week ended Oct. 11. [EIA/S] [API/S]
If correct, that would be the first time energy firms boosted stockpiles for three weeks in a row since April and compares with a withdrawal of 4.5 million barrels during the same week last year and an average increase of 1.1 million barrels over the past five years (2019-2023).