Oil prices fall as market reacts to lower OPEC demand forecasts, Middle East tensions
Date
8/13/2024 5:00:59 AM
(MENAFN) Oil prices experienced a slight decline in early trading on Tuesday, ending a five-day streak of gains. This retreat came as markets shifted their focus back to concerns over demand, following OPEC’s recent adjustment to its 2024 demand growth forecast. The reduction in OPEC’s forecast was prompted by a weak economic outlook in China, which has been underperforming expectations.
Brent crude futures fell by 41 cents, or 0.5 percent, to USD81.89 per barrel by 0005 GMT, while U.S. West Texas Intermediate (WTI) crude futures dropped 43 cents, or 0.5 percent, to USD79.63. Despite Monday’s gains—where brent crude rose more than 3 percent and U.S. crude futures increased by over 4 percent—the market is now grappling with the implications of OPEC's revised forecast. This adjustment is the first since OPEC’s initial forecast announcement in July 2023 and reflects concerns over sluggish demand in China, attributed to reduced diesel consumption and ongoing property market troubles.
Adding to the market’s uncertainty, tensions in the Middle East are escalating, with the U.S. preparing for potential major attacks from Iran or its proxies in the region, according to White House National Security spokesperson John Kirby. Analysts warn that such attacks could disrupt global crude supplies, leading to a spike in oil prices. Additionally, any significant escalation might prompt the U.S. to impose a ban on Iranian oil exports, potentially impacting the supply of 1.5 million barrels per day.
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