Sonali Paul

MELBOURNE, (Reuters) – Oil prices fell on Wednesday after a mixed session in the previous session. This was due to concerns that rising coal prices and European prices will stoke inflation, slow down global growth and increase oil demand.

Oil prices were also affected by a strong U.S. Dollar, which traded at a near one-year peak. This makes it more costly for people who hold other currencies.

U.S. West Texas Intermediate oil futures dropped 0.9% or 71cents to $79.93/barrel at 0247 GMT on Tuesday after having gained 12 cents on Tuesday.

Futures dropped 70 cents or 0.8% to $82.72 per barrel on Tuesday, adding 23 cents to their loss.

The International Monetary Fund cut Tuesday its growth outlook for the United States, and other major countries. This was due to concern that disruptions in supply chains and price pressures may be preventing the world’s economic recovery following the outbreak of coronavirus.

Analysts at Commonwealth Bank highlighted that the IMF was concerned about “momentum having weakened” and that uncertainty had increased.

But oil experts are still focusing on whether rising gas and coal prices might lead to greater demand for oil products.

In a note, ANZ Research analysts stated that “there are growing expectations” that higher prices for natural gas and thermal coal would increase demand for fuel oils and diesel.

Market participants are also waiting for U.S. crude oil inventory data. This has been delayed by one day after Monday’s Columbus Day holiday.

Reuters analysts polled estimate an increase of 100,000 barrels by inventories in the week up to Oct. 8 – marking a third week of gains.

Also, they estimated that gasoline inventories rose to about 100,000 barrels while distillate inventories, which includes diesel and jet fuel, fell by 1 million barrels.

The American Petroleum Institute is an industry organization and data are due by 4:30 p.m. ET (2030 GMT) Wednesday, and the U.S Energy Information Administration (on Thursday).