OIL FUTURES: Crude dips after five-session rally as OPEC cuts demand growth forecast

Crude oil futures edged lower in midmorning trading in Asia on Aug. 13, following a five-session rally, as weak global oil demand offset fears of escalating Middle East tensions.

At 11:28 Singapore time (0328GMT), the ICE October Brent crude oil futures contract was down 76 cents/b (0.92%) at $81.54/b, while the NYMEX September light sweet crude contract fell 72 cents/b (0.90%) to $79.34/b.

OPEC has revised its global oil demand forecast downward for both 2024 and 2025, reducing the 2024 demand estimate by 140,000 b/d to 104.32 million b/d -- the first adjustment since March -- and lowering the 2025 demand growth forecast by 70,000 b/d to 1.78 million b/d.

"Market sentiment was further affected by uncertainty surrounding central bank monetary policies, particularly prospects for prolonged high interest rates in the US as a means of addressing ongoing inflation. Additionally, concerns about China's economic performance and demand growth, coupled with a slower-than-expected onset of the driving season, contributed to the downward pressure on prices," OPEC said.

Striking a bearish tone in its closely watched monthly oil market report Aug. 12, the producers group said the "call" on the OPEC+ alliance's crude -- the volume of oil it must produce to balance the market -- would be 43.0 million b/d in 2024 and 43.6 million b/d in 2025.

This represents a decrease of 100,000 b/d and 300,000 b/d, respectively, from July's forecast, marking the second consecutive monthly reduction.

"The energy calendar for the week remains quite eventful," commodity strategists at ING said.

Traders await the International Energy Agency's monthly oil market report, due later Aug. 13, as well as the US weekly inventory reports and consumer price index data out Aug. 14 for cues from the world's largest oil consumer.

Dubai swaps

Dubai crude swaps and intermonth spreads strengthened in midmorning trading in Asia on Aug. 13 from the previous close.

The October Dubai swap was pegged at $79.30/b at 10 am Singapore time (0200 GMT), up $1.41/b (1.81%) from the Aug. 12 Asian market close.

The September/October Dubai swap intermonth spread was pegged at 70 cents/b at 10 am Singapore time, up 3 cents/b from the Aug. 12 Asian close, and the October/November intermonth spread was pegged at 54 cents/b, up 1 cent/b over the same period.

The October Brent-Dubai exchange of futures for swaps was pegged at $2.47/b, widening 22 cents/b from the previous close.