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Oil costs edge down, projections for higher oil output, weak need growth weigh

Oil rates dropped somewhat early on Thursday on expectations of greater worldwide production in the middle of projections for weak demand growth, while a firmer dollar likewise kept a cover on rates.

Brent unrefined futures were down 6 cents, or 0.08%, at $ 72.22 a barrel by 0133 GMT. U.S. West Texas Intermediate crude ( WTI) futures were down 13 cents, or 0.19%, at $68.30.

The U.S. Energy Details Administration has slightly raised its expectation of U.S. oil output to an average 13.23 million barrels per day this year, or 300,000 bpd greater than in 2015's record of 12.93 million bpd, and up from 13.22 million bpd projection previously.

The company also raised its international oil output forecast for 2024 to 102.6 million bpd, from its prior forecast of 102.5 million bpd. For next year, it anticipates world output of 104.7 million bpd, up from 104.5 million bpd formerly.

This follows the Organization of the Petroleum Exporting Countries on Tuesday again cut its global oil demand development projection to 1.82 million bpd in 2024, below 1.93 million bpd forecast last month, on weak need in China, India and other regions, sending oil prices to their least expensive in nearly two weeks.

The EIA projections oil need growth weaker than OPEC, at about 1 million bpd in 2024, although that is up from its previous projection of about 900,000 bpd.

Market individuals are now waiting on the International Energy Firm's oil market report, due later on in the day, and the EIA's U.S. petroleum and product stockpiles data for further trading hints.

A weak outlook for need in China continues to weigh on sentiment. The stronger USD is developing strong headwinds for commodities, ANZ Research study stated in a note.

The U.S. dollar rose to near a seven-month high versus major currencies on Wednesday after data showed U.S. inflation for October increased in line with expectations, suggesting the Federal Reserve will keep cutting rates.

A firmer dollar makes products priced in the greenback costly for buyers using other currencies.

(source: Reuters)