OPEC+ oil supply cuts could tip world into recession, IEA says

The IEA downgraded its oil demand growth estimates slightly for this year to 1.9 million bpd and by 470,000 bpd in 2023 to 1.7 million bpd.

This comes after OPEC on Wednesday cut its outlook for demand growth this year by 460,000 bpd to 2.64 million bpd, citing the resurgence of China's COVID-19 containment measures and high inflation. It lowered its 2023 oil demand forecast by 360,000 bpd to 2.34 million bpd.

"The prospect of sustained growth is deteriorating fast because of entrenched inflationary pressure, quantitative tightening, continuous hikes in borrowing costs, a strong dollar, and COVID-related constraints in the world’s second biggest economy, China," PVM analyst Tamas Varga said.

Worsening demand for crude oil is contributing to inventory builds. US 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 US 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 US currency more attractive to foreign investors.

Brent crude futures rose 49 cents, or 0.5 percent, to $92.94 a barrel by 08:33 GMT. US West Texas Intermediate crude was up 37 cents, or 0.4 percent, at $87.64 a barrel.