Oil prices dip as IMF lowers global growth outlook, Brent crude at $84.98

The IMF downgraded its global economic growth forecasts for 2018 and 2019 on Tuesday, raising concerns that demand for oil products may slump as well

Oil prices edged down on Wednesday after the IMF lowered its global growth forecasts, but markets were supported as Hurricane Michael churned towards Florida causing the shutdown of nearly 40 per cent of US Gulf of Mexico crude output.

Brent crude futures were down 2 cents at $84.98 a barrel by 0640 GMT, after a 1.3 per cent gain on Tuesday.

US West Texas Intermediate (WTI) crude was down by 12 cents, or 0.2 per cent, at $74.84 a barrel, after rising nearly 1 per cent in the previous session.

The International Monetary Fund downgraded its global economic growth forecasts for 2018 and 2019 on Tuesday, raising concerns that demand for oil products may slump as well.

Trade tensions and rising import tariffs were taking a toll on commerce, while emerging markets struggle with tighter financial conditions and capital outflows, the IMF said.

"Prices are peaking at the most opportunistic time given the waning global growth narrative," said Stephen Innes, head of trading APAC at OANDA in Singapore.

In the United States, nearly 40 per cent of daily crude oil production was lost from offshore US Gulf of Mexico wells on Tuesday because of platform evacuations and shut-ins ahead of Hurricane Michael.

Michael has strengthened into an "extremely dangerous" Category 4 hurricane, according to the latest advisory from the US National Hurricane Centre.

Oil producers evacuated personnel from 75 platforms as the storm made its way through the central Gulf on the way to landfall on Wednesday on the Florida Panhandle.

The country's largest privately owned crude terminal, the Louisiana Offshore Oil Port LLC, said late on Tuesday it had halted operations at its marine terminal.

The facility is the only US port able to fully load and unload tankers with a capacity of 2 million barrels of oil.

Companies turned off daily production of about 670,800 barrels of oil and 726 million cubic feet of natural gas by midday on Tuesday, according to offshore regulator the Bureau of Safety and Environmental Enforcement.

Iran's crude exports fell further in the first week of October, according to tanker data and an industry source, as buyers sought alternatives ahead of US sanctions that take effect on November 4.

Industry and government data on US crude inventories will be delayed by one day this week because of a public holiday on Monday. The American Petroleum Institute is due to release data on Wednesday, while the US Energy Information Administration is due to publish on Thursday.

"There seems to more positive supply chatter in the equation this week, and although we know it's maintenance season, the markets are so long positioned that we could see an outsized move on a big build," Innes said.