OPEC cut its demand growth estimates for 2026 to about 1.2 million barrels per day.
Oil was struggling for direction Thursday as traders weighed OPEC's lower demand outlook for this year, while the International Energy Agency flagged greater volatility ahead.
International benchmark Brent crude futures for July were down 0.21% at $105.42 a barrel, while U.S. West Texas Intermediate futures for June fell 0.16% at $100.87 per barrel. Both had started the day marginally higher.
OPEC cut its demand growth estimates for 2026 to about 1.2 million barrels per day, from 1.4 million bpd previously, in its latest monthly update. OPEC production fell by 1.7 million bpd in April and has declined more than 30%, or 9.7 million bpd since the start of the Iran war in late February.
OPEC's latest update is expected to be the last one to include data from the United Arab Emirates, which exited the cartel on May 1.
The International Energy Agency's on Wednesday also highlighted the impact of the Iran war on oil supply. "More than ten weeks after the war in the Middle East began, mounting supply losses from the Strait of Hormuz are depleting global oil inventories at a record pace," the IEA said.
With more than 14 million bpd of supply cut, the overall loss from Gulf producers is now over a billion barrels, the IEA said, adding that greater price volatility is likely as peak summer demand approaches.
"The duration of elevated fuel prices remains a subject of intense discussion and is closely tied to ongoing geopolitical developments surrounding the closure of the Strait of Hormuz, as well as the potential damage to oil and gas infrastructure in the Middle East from further conflict," ING analysts said in a note.
U.S. President Donald Trump's meeting with Chinese President Xi Jinping will also be closely watched by traders.
Former US Commerce Secretary Carlos Gutierrez told CNBC's "Squawk Box Asia" Wednesday that China wants the conflict to end as it's the biggest customer of oil that flows via the Hormuz Strait. "President Xi wants this war to be over as much as President Trump does." — CNBC's Spencer Kimball contributed to this report.
Correction: This story has been updated to correct the day to Thursday.
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