Crude oil prices decline 1% after scaling multi-month highs on OPEC's demand warning

Crude oil prices fell over a dollar a barrel on Thursday, as an OPEC report stoked summer demand worries and traders took profits after benchmarks scaled multi-month highs in the previous session.

Brent crude fell $1.24, or 1.4 per cent, to settle at $86.09 a barrel, only the second time this month that the global benchmark has finished lower. The US West Texas Intermediate (WTI) slipped $1.10, or 1.3 per cent, to close at $82.16 a barrel.

Both benchmarks had gained 2 per cent on Wednesday to their highest in more than a month, as cooling US inflation spurred hopes that the US Federal Reserve will stop raising interest rates.

The Organization of the Petroleum Exporting Countries (OPEC) flagged downside risks to summer oil demand in a monthly report on Thursday, highlighting rising inventories and challenges to global growth.

The report shed light on the reasons behind a surprise production cut announced by OPEC+, which includes Russia and other OPEC allies, at the start of this month.

Despite Thursday's declines, the OPEC+ decision has pushed Brent futures up nearly 8 per cent so far this month, and it continues to raise expectations of potential future tightness in the oil markets.

Oil price declines were also limited as OPEC kept its forecast for global oil demand growth in 2023 unchanged. Other economic indicators lent further support.

The US dollar index in March, boosting expectations that the Federal Reserve is near the end of its interest rate hiking cycle.

A weaker greenback makes dollar-denominated oil cheaper for investors holding other currencies, lifting demand.

China's crude oil imports in March surged 22.5 per cent from a year earlier to the highest since June 2020, data showed on Thursday.

With Reuters Inputs