By Arunima Kumar
BENGALURU (Reuters) - Oil prices dipped on Tuesday after five straight sessions of gains as OPEC's move to cut its forecast for demand growth in 2024 tempered fears of supply risks posed by widening conflict in the Middle East.
Benchmark Brent crude futures were down 98 cents, or 1.2%, at $81.32 a barrel as of 1323 GMT. U.S. West Texas Intermediate crude was also down 1.2%, dropping 93 cents to $79.13.
Brent on Monday gained more than 3%, closing at $82.30 a barrel after hitting a seven-month low of $76.30 a week earlier.
"Crude oil traders are facing a geopolitical curve-ball courtesy of yet another face-off between Israel and Iran. But unless oil and gas facilities are hit, any upside for oil prices will not be sustained in the face of uncertain demand," Gaurav Sharma, an independent analyst, said.
"Even OPEC – up until now the most bullish of demand forecasters – revised its projections lower on Monday on concerns over China's imports," Sharma added.
The Organization of the Petroleum Exporting Countries' (OPEC) cut to expected demand in 2024 came even as the group and its allies, known as OPEC+, have aimed to raise output from October.
Also on Tuesday, the International Energy Agency (IEA) kept its 2024 global oil demand growth forecast unchanged but trimmed its 2025 estimate, citing the impact of lacklustre Chinese consumption on economic growth.
Meanwhile, an escalation of conflict in the Middle East could endanger crude supply from one of the world's main oil-producing regions.
The U.S. has prepared for what could be significant attacks by Iran or its proxies in the region as soon as this week, White House national security spokesperson John Kirby said on Monday.
"A cocktail of supply concerns and signs that demand is unlikely to suffer as believed at the beginning of last week could help oil prices to continue drifting north for a while longer," said Charalampos Pissouros, senior investment analyst at brokerage XM.
Markets are also preparing for Wednesday's U.S. consumer price index report that will give a crucial read on inflation.