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Oil prices dipped on Tuesday, settling slightly lower after a higher-than-expected forecast for U.S. crude oil production and bearish economic data, but persistent geopolitical tensions limited declines.

Brent futures for May delivery settled 29 cents lower at $81.92 a barrel. The April U.S. West Texas Intermediate (WTI) crude contract ended 37 cents lower at $77.56.

U.S. consumer prices increased solidly in February, the U.S. Bureau of Labor Statistics said, pinning nagging inflation largely on higher costs for gasoline and shelter.

“This does show a second month of an increase,” said Tim Snyder, an economist at Matador Economics, noting the numbers were still within expectations. “Consensus in the markets says the Fed will not move to lower rates until June,” he added.

On Tuesday, OPEC stuck to its forecast for relatively strong growth in global oil demand in 2024 and 2025, and further raised its economic growth forecast for this year saying there was more room for improvement.

On the supply side, U.S. Energy Information Administration (EIA) raised its 2024 outlook for domestic oil output growth by 260,000 barrels per day to 13.19 million barrels, versus a previously forecast rise of 170,000 bpd.

The boosted forecast could be due to higher assumed oil prices, said UBS analyst Giovanni Staunovo.

The International Energy Agency (IEA), which advises industrialized nations, is expected to release its oil supply and demand forecast on Thursday.

Last week, economic data from China, the world’s biggest oil buyer, suggested softening demand even as crude imports increased in the first two months of the year from a year earlier.

“Bearish demand sentiment and growing non-OPEC supply leave little room for the market to be bullish on oil prices at this time,” said Serena Huang, head of APAC analysis at Vortexa.

Hopes of a ceasefire in Israel’s war against Hamas have faded, with negotiations deadlocked in Cairo while Israel and Lebanon’s Hezbollah continue to exchange fire.

Though the Gaza conflict has not led to significant oil supply disruptions, Yemen’s Iran-aligned Houthis have been attacking ships in the Red Sea and Gulf of Aden since November in solidarity with Palestinians.

Air strikes attributed to a U.S.-British coalition hit port cities and small towns in western Yemen on Monday and the Houthis said on Tuesday that they had fired missiles at what they described as a U.S. ship in the Red Sea.

Traders are becoming inured to such attacks, said John Evans at oil broker PVM.

“The inventory of oil that might be affected is not lost, it is just delayed – and with the new shipping times being part of the new norm, ‘delayed’ will eventually not be applicable,” he said.

In Russia, the world’s second-largest oil exporter, a Ukrainian attack on energy facilities set ablaze Lukoil’s NORSI refinery

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