Oil prices rebounded on Wednesday following short-covering, after falling close to a two-week low in the previous session due to OPEC's downward revision of its demand forecast. Meanwhile, the dollar reached a seven-month high, limiting gains in crude oil prices.

Brent crude futures increased by 61 cents, or 0.9%, to $72.50 per barrel at 1:13 p.m. EST (1813 GMT), while U.S. West Texas Intermediate (WTI) crude futures rose by 59 cents, or 0.9%, to $68.71. Both benchmarks closed at their lowest levels in nearly two weeks on Tuesday after the Organization of the Petroleum Exporting Countries reduced its global oil demand growth forecasts for 2024 and 2025, citing concerns about demand in China.

OPEC pointed to weaknesses in China, India, and other regions as the reason for its decision, marking the fourth consecutive downward revision for 2024. The International Energy Agency, which has a significantly lower demand growth forecast compared to OPEC's, is scheduled to release its updated estimate on Thursday.

"The forecast is undoubtedly bearish, and the market is still processing it," said Bob Yawger, director of energy futures at Mizuho. However, the market recovered as some speculative investors attempted to recoup their losses, according to Yawger.

Russian President Vladimir Putin and Saudi Crown Prince Mohammed bin Salman emphasized the importance of maintaining "close coordination" within the OPEC+ group of oil producers during a phone call on Wednesday, according to the Kremlin. On the supply side, markets could still face disruptions from Iran or further conflict between Iran and Israel, according to a note from Barclays.

Senator Marco Rubio, expected to be chosen as secretary of state by Trump, could be bullish for oil prices due to his hawkish stance on Iran, which might lead to sanctions being enforced and potentially remove 1.3 million barrels per day from global supply, according to Panmure Liberum's Ashley Kelty. Iran's oil minister stated that Tehran had plans in place to sustain oil production and exports and was prepared for possible oil curbs by the U.S., as reported by the ministry's news website Shana.

The dollar's advance to near a seven-month high against major currencies, following data showing U.S. inflation for October increased as expected, suggested that the Federal Reserve would continue to cut rates. A stronger dollar makes oil, which is priced in dollars, more expensive for holders of other currencies, potentially reducing demand.

The American Petroleum Institute's weekly inventory data was also in focus, with analysts polled by Reuters anticipating a 100,000-barrel increase in crude stocks last week. Government data is due on Thursday at 11 a.m. Both reports are delayed by a day due to Monday's Veterans Day holiday.

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