Oil prices drifted lower Tuesday after OPEC cut its estimate for world oil demand for this year and said it expects no growth in demand for 2012.
Benchmark crude fell 47 cents to $84.94 per barrel in midday trading in New York. Brent crude, used to price many international kids of oil, rose 17 cents to $106.82 a barrel in London.
Oil prices had risen for five straight days before Tuesday. Fears that the world economy is headed toward a recession have eased and hopes that Europe is taking steps to resolve its debt crisis have risen.
"The only fundamentals that apply to oil are economic expectations and currency trends," said Walter Zimmerman, an analyst at ICAP. "Nothing else seems to matter."
OPEC said Tuesday that the weak world economy was taking its toll on oil demand, especially in developed nations. When the economy slows, demand for oil falls because drivers buy less gasoline, shippers buy less diesel and jet fuel, and travelers stay home.
The Organization of Petroleum Exporting Countries said demand will be about 180,000 barrels per day less than it forecast for 2011 and 100,000 barrels per day less than forecast for 2012.
That would still be a record for world oil consumption, at just over 88 million barrels per day, for 2011. Oil demand in developed nations has been flat or declining, but demand from the developing economies of Asia has been pushing world oil consumption higher.
OPEC said policies in China and India to curb growing oil consumption will lead to lower demand in those countries than originally forecast.
OPEC, which produces about a third of the world's oil, imposes production quotas on its 12 member nations in an effort to keep oil prices stable. It adjusts production up if demand rises, and cuts production if demand falls in an effort to keep prices up.
Rich Ilczyszyn, Senior Market Strategist at MF Global, said he expects oil prices to rise or fall with the stock market in the coming weeks. He does not expect the price to fall below $75 per barrel or to rise much beyond $90 per barrel.
On Tuesday stocks wavered between small gains and losses in midday trading.
Gasoline pump prices were unchanged at a national average of $3.40 a gallon, according to AAA, Wright Express and Oil Price Information Service. That's 59 cents higher than a year ago.
In other energy trading, heating oil fell 2 cents to $2.8871 per gallon and gasoline futures rose 2 cents to $2.7188 per gallon. Natural gas futures increased by 2 cents to $3.558 per 1,000 cubic feet.
AP Writer George Jahn contributed to this story from Vienna. Jonathan Fahey can be reached at http://twitter.com/JonathanFahey.
Author Of Original Patriot Act: No, The Law Was Never Intended to Collect Data On All Americans | Katie Pavlich
Hollywood Actor Vince Vaughn: We Have The Right to Bear Arms to Resist Corrupt and Abusive Government | Katie Pavlich
Accountability? Acting TSA Head Reassigned After Agency Misses 96 Percent of Attacks During Test | Katie Pavlich
CBS' Bob Schieffer: Yeah, The Media Probably Didn't Ask Enough Questions About Barack Obama | Katie Pavlich