Oil prices eased in Asian trade today as investors locked in profits after they hit their highest levels this year on forecasts of strong demand.

Analysts said traders will keep their eye on the Federal Reserve meeting next week 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 $96.42 a barrel in mid-morning trade after rising by $1.76 in closing US trade yesterday. Brent crude for March delivery dipped 32 cents to $107.95 after gaining $1.54.

IAEA estimates

The International Energy Agency in its monthly report projected that the 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 pick-up in growth.

IMF growth forecast

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 per cent last year.

The optimistic outlook was fuelled by a solid recovery in the US, while other countries move away from austerity.

Fed bond-buying

Eyes are now on the US Fed, which last month said that it would cut its bond-buying scheme by $10 billion a month to $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.

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