London: Brent crude slipped on Friday from an eight-day rally to a six-month high in the previous session, as the International Energy Agency (IEA) cut its oil growth demand forecast for a sixth consecutive month due to a weak global economy.
The downside was, however, limited by robust Chinese oil demand and political tensions over Iran.
Brent crude futures fell $1.18 to $117.41 a barrel by 1010 GMT. On Thursday, Brent closed at $118.59, its highest close since late July.
US crude fell 88 cents to $98.96 a barrel.
The sharp rise in Brent prices over the past 8 days have prompted investors to lock in profits ahead of the weekend with concerns over Greek debt still lingering.
“The market has paused for breath after its sustained rally,” Mark Thomas, head of European energy at brokerage Marex Spectron in London, said.
Global oil demand will grow by less than 1% in 2012, the IEA said in its monthly oil report on Friday.
The agency, which provides energy advice to the world’s most industrialised nations, cut its global oil demand growth forecast for this year by 250,000 barrels per day (bpd) to 800,000 bpd.
“This month’s report dwells on recent economic downgrades, and resultant weaker oil products demand growth for 2012,” the IEA said. “This is providing a ceiling for otherwise stubbornly-high crude prices.
The euro slipped from two-month highs on Friday after euro zone finance ministers sought further measures from Greece before signing off on a second bailout, keeping the threat of a chaotic default alive and pressuring risk appetite.
China’s crude oil imports stayed firm last month, rising 7.4% from a year ago to 5.5 million bpd, its third-highest on record.
Analysts pointed out that the Chinese data was distorted by the week-long Lunar New Year break in January, adding the long-term oil demand outlook from China would remain positive.
“Demand has been affected by seasonal factors. We expect GDP growth to accelerate in China as the government implements more stimulatory measures, and this will be positive for oil demand,” said Gordon Kwan, head of energy research at Mirae Asset Management in Hong Kong.