Oil prices stabilize as market focus shifts to demand concerns following OPEC forecast cut

(MENAFN) Oil prices leveled off on Monday, ending a five-day winning streak, as market attention turned towards demand concerns following OPEC's reduction of its 2024 demand growth forecast. This adjustment comes amid a pessimistic outlook for China's economic recovery, which has raised worries about future oil consumption. As a result, Brent crude futures dipped by 30 cents, or 0.36 percent, to settle at USD82.00 per barrel, while U.S. West Texas Intermediate (WTI) crude futures fell by 29 cents, or 0.36 percent, to USD79.77 per barrel. The shift in market sentiment marks a pause in the recent rally driven by geopolitical tensions.

Despite Monday's stabilization, Brent crude had surged more than 3 percent earlier in the session, and U.S. crude futures had climbed over 4 percent. These gains were fueled by fears that the ongoing conflict in the Middle East could escalate, potentially leading to significant disruptions in oil supply. The heightened geopolitical risks had provided strong support for oil prices over the past week, but the focus has now shifted back to underlying demand fundamentals, especially in light of the challenges facing key economies such as China.

OPEC's decision to revise its global oil demand forecast for 2024 underscores the complexities facing the broader OPEC+ alliance as it considers its production strategy for the coming months. The market is keenly watching how the group will navigate these challenges, particularly as it approaches plans to increase output starting in October. Additionally, investors are awaiting the U.S. consumer price index (CPI) report, due later today, which is expected to offer crucial insights into inflation trends. The CPI data will likely influence market expectations for future Federal Reserve rate decisions, further impacting oil prices as the year progresses. 

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