Oil prices have experienced a decline as market participants express concerns over increased global production and sluggish demand growth. The recent strengthening of the US dollar has also contributed to the downward pressure on oil prices.

In early trading on Thursday, Brent crude futures fell by 0.5% to $71.93 per barrel, while US West Texas Intermediate (WTI) crude futures dropped by 0.6% to $68.01 per barrel. This decline reverses most of the gains from the previous session.

The Organization of the Petroleum Exporting Countries (OPEC) has revised its global oil demand growth forecast for 2024 down to 1.82 million barrels per day (bpd), a decrease from the previous forecast of 1.93 million bpd. This revision is attributed to weak demand in key regions such as China and India. Meanwhile, the US Energy Information Administration (EIA) has slightly increased its forecast for US oil output to an average of 13.23 million bpd for the year, up from last year's record of 12.93 million bpd.

The EIA also raised its global oil output forecast for 2024 to 102.6 million bpd, with expectations for 2025 set at 104.7 million bpd. However, the EIA's oil demand growth forecasts remain weaker than OPEC's, predicting about 1 million bpd in 2024.

Market analysts are closely monitoring China's economic activity, as it remains a significant factor in the current oil demand outlook. Despite various stimulus measures by Chinese authorities, there has been little improvement in economic activity, contributing to the concerns of an oversupply in 2025.

Additionally, the US dollar has reached a near seven-month high against major currencies, further impacting oil prices. A stronger dollar makes commodities priced in the greenback more expensive for buyers using other currencies.

The market is now awaiting further insights from the International Energy Agency's oil market report and the EIA's US crude oil and product stockpile data, which are expected to provide additional trading cues.