LONDON, Feb 16 Reuters Oil steadied on Friday as slowing demand forecast by the International Energy Agency IEA offset support from geopolitical tensions and optimism that the U.S. Federal Reserve might cut interest rates sooner rather than later this year.

On Thursday, the IEA said global oil demand growth was losing momentum and trimmed its 2024 growth forecast, in contrast to the view held by the Organization of the Petroleum Exporting Countries OPEC.

Brent crude futures were down 17 cents, or 0.2, at 82.69 a barrel at 1500 GMT. U.S. West Texas Intermediate crude futures rose 59 cents, or 0.8, to 78.62 with the nearby March contract expiring on Tuesday. The April contract rose 20 cents, or 0.3, to 77.79.

There was a tentative attempt to recover yesterday morning, but hopes were shattered after the IEA published its updated supplydemand outlook, said Tamas Varga of oil broker PVM.

Crude climbed over 1 on Thursday as a largerthanexpected drop in U.S. retail sales prompted hopes the Fed will soon start cutting rates, which could be positive for oil demand.

But U.S. producer prices increased more than expected in January amid strong gains in the costs of services, which could amplify worries that inflation was picking up.

Hopes for U.S. rate cuts provided support on Thursday, but investors are now adjusting their positions ahead of a long holiday weekend in the U.S., said Hiroyuki Kikukawa, president of NS Trading, a unit of Nissan Securities.

Meanwhile, Middle…