By Scott DiSavino
NEW YORK - Oil prices were flat on Wednesday after erasing earlier losses as surging fuel costs for power generation offset expectations that demand growth will fall as a result of major economies being under strain from inflation and supply chain issues.
Brent futures fell 9 cents, or 0.1%, to $83.33 a barrel by 11:29 a.m. EDT (1529 GMT), while U.S. West Texas Intermediate (WTI) crude rose 4 cents, or 0.1%, to $80.68.
That puts WTI on track to close at its highest since October 2014 for a fourth day in a row and keeps the U.S. benchmark trading in overbought territory.
Prices had come under pressure on Wednesday, when China, the world's biggest crude importer, released data showing September imports fell 15% from a year earlier.
China, along with Europe and India, faces coal and natural gas shortages that have pushed up prices for the fuels burned for electricity generation and are leading to oil products being used as a substitute.
The Organization of the Petroleum Exporting Countries (OPEC) has trimmed its world oil demand growth forecast for 2021 while maintaining its 2022 view.
But OPEC said surging natural gas prices could boost demand for oil products as end users switch.
"Today’s monthly OPEC report appeared to offer something for both the bulls and the bears with the Agency unexpectedly reducing their global oil demand forecast ... for this year while adjusting their non-OPEC supply growth estimate downward," said Jim Ritterbusch, president of Ritterbusch and Associates in Galena, Illinois.
In Russia, President Vladimir Putin said on Wednesday that oil prices could reach $100 a barrel and repeated an earlier announcement that Moscow was ready to provide more natural gas to Europe if requested.
The bigger issue for the markets, however, is the broader impact of the energy supply crunch, especially in the world's second biggest economy China, on oil demand.
"These are troubling times for China. A severe energy crisis is gripping the country," said Stephen Brennock of broker PVM.
The International Monetary Fund on Tuesday cut its growth outlook for the United States and other major economies on worries supply chain disruptions and cost pressures are holding back a global economic recovery from the pandemic.
In the United States, the government projected consumers will spend more to heat their homes this winter than last year due mostly to surging energy commodity prices.
A strong U.S. dollar, trading near a one-year high, also weighed on oil prices, as it makes oil more expensive for those holding other currencies.
The market is awaiting U.S. oil inventory data, delayed by a day following the Columbus Day holiday on Monday.
Data from the American Petroleum Institute, an industry group, is due at 4:30 p.m. EDT (2030 GMT) on Wednesday and from the U.S. Energy Information Administration on Thursday.
