Oil prices fall following OPEC cut demand forecasts for 2024
Date
8/13/2024 5:43:53 AM
(MENAFN) Oil prices experienced a slight decline on Tuesday, ending a five-day streak of gains as market attention shifted towards demand concerns. OPEC’s recent revision of its 2024 demand growth forecast has contributed to this shift. brent crude futures fell by 41 cents, or 0.5 percent, to USD81.89 per barrel, while U.S. West Texas Intermediate (WTI) crude futures decreased by 43 cents, or 0.5 percent, settling at USD79.63 per barrel. Despite these declines, both Brent and WTI had shown significant increases the previous day, with Brent rising more than 3 percent and WTI gaining over 4 percent.
The reduction in OPEC's forecast highlights the challenges faced by the OPEC+ alliance in adjusting production levels. This adjustment, the first since the forecast was issued in July 2023, reflects a weakened outlook for oil demand in China, driven by lower diesel consumption and a persistent property crisis in the country. The ongoing conflict in the Middle East, with potential major attacks by Iran or its proxies, further complicates the situation. Analysts warn that such attacks could disrupt global oil supplies, potentially leading to a sharp increase in prices and prompting the U.S. to impose restrictions on Iranian oil exports, which could affect up to 1.5 million barrels per day.
Additionally, the market is awaiting the U.S. Consumer Price Index report, scheduled for release on Wednesday, which is anticipated to provide critical insights into inflation trends. There is growing concern among investors that negative data could signal an economic slowdown, adding further uncertainty to the oil market.
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