Analysts said traders will keep their eye on a meeting next week by the Federal Reserve for more clues about its plans to wind down its massive stimulus for the US economy. New York's main contract West Texas Intermediate for March delivery was down 31 cents at USD 96.42 a barrel mid-morning trade after rising by USD 1.76 in closing US trade yesterday.
Brent crude for March dipped 32 cents to USD 107.95 after gaining USD 1.54. The International Energy Agency in its monthly report projected demand for crude would grow 1.3 million barrels per day in 2014, up from a previously forecast increase of 1.2 million.
It said consumption accelerated at the end of 2013 as advanced economies, led by the United States, saw growth pick up. That came as the International Monetary Fund raised its global growth forecast for the first time in nearly two years -- predicting 3.7 per cent expansion in 2014, up from its earlier 3.6 per cent estimate.
It grew three percent last year. The optimistic outlook was fuelled by a solid recovery in the US while other countries move away from austerity. Eyes are now on the US Fed, which last month said it would cut its bond-buying scheme by USD 10 billion a month to USD 75 billion as of January.
"Markets will be watching for outcomes from the Fed meeting next week, particularly if bond purchases are to be reduced," Sanjeev Gupta, head of the Asia-Pacific oil and gas practice at consultancy firm Ernst and Young, said.