Brent Slips on Weaker Demand Forecasts

Brent crude oil dropped on Wednesday after both the US government and the Organization of Petroleum Exporting Countries cut their global oil demand forecasts. The commodity traded at $102.51 at 7:32 GMT on Wednesday morning. According to

, the US Energy Information Agency cut its demand growth forecast by 20,000 barrels per day on Tuesday, which weighed on Brent prices. OPEC also cut its 2013 global oil demand growth to 780,000 barrels per day, 10,000 barrels less than its previous estimate. However, the OPEC report did have a silver lining as the agency said it expects demand for the commodity to grow rapidly during the second half of the year due to economic recovery and better seasonal consumption. An unexpected jump in US inventories earlier in the week also kept a lid on Brent prices. The number one oil consuming nation's oil inventories have been well above five year averages for the summer peak driving season. Historically, the seasonal demand in the summer has depleted the country's stockpiles and driven prices up. Worries about the US Federal Reserve cutting back on its stimulus program also put pressure on Brent prices after the Bank of Japan decided not to follow through on a much anticipated stimulus program. The Japanese central bank announced a $1.4 trillion stimulus plan in April, but decided against implementing it. With investors already pouring over US economic data for clues about when the Fed will cut back on its own $85 billion per month stimulus plan, the BoJ announcement hurt investor sentiment.