Oil prices dip as IMF lowers global growth outlook

Oil prices edged down on Wednesday after the IMF lowered its global growth forecasts, but markets were supported as Hurricane Michael churned towards Florida causing the shutdown of nearly 40 percent of U.S. Gulf of Mexico crude output.

Brent crude futures were down 2 cents at $84.98 a barrel by 0640 GMT, after a 1.3 percent gain on Tuesday.

U.S. West Texas Intermediate (WTI) crude was down by 12 cents, or 0.2 percent, at $74.84 a barrel, after rising nearly 1 percent in the previous session.

The International Monetary Fund downgraded its global economic growth forecasts for 2018 and 2019 on Tuesday, raising concerns that demand for oil products may slump as well.

Trade tensions and rising import tariffs were taking a toll on commerce, while emerging markets struggle with tighter financial conditions and capital outflows, the IMF said.

“Prices are peaking at the most opportunistic time given the waning global growth narrative,” said Stephen Innes, head of trading APAC at OANDA in Singapore.

In the United States, nearly 40 percent of daily crude oil production was lost from offshore U.S. Gulf of Mexico wells on Tuesday because of platform evacuations and shut-ins ahead of Hurricane Michael.

Michael has strengthened into an “extremely dangerous” Category 4 hurricane, according to the latest advisory from the U.S. National Hurricane Center.

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