Brent crude futures fell below US$70 a barrel on Tuesday for
the first time since December 2021, after OPEC Plus revised down its demand
forecast for this year and 2025.
Brent crude futures were traded at US$69.51 a barrel and US
West Texas Intermediate (WTI) crude slipped to US$66.21. On Monday, both
benchmarks had risen about 1%.
On Tuesday, the Organization of the Petroleum Exporting Countries
(OPEC) in a monthly report said world oil demand will rise by 2.03
million barrels per day (bpd) in 2024, down from last month's forecast for
growth of 2.11 million bpd. Until last month, OPEC had kept the forecast
unchanged since it was first made in July 2023.
OPEC also cut its 2025 global demand growth estimate to 1.74
million bpd from 1.78 million bpd. Prices slid on the weakening global demand
prospects and expectations of oil oversupply.
On Monday, Chinese data showed consumer inflation
accelerated in August to its fastest in half a year, though domestic demand
remained fragile, and producer price deflation worsened.
Data released on Tuesday showed China's exports
grew in August at their fastest in nearly 1-1/2 years, yet imports disappointed
with domestic demand depressed.
“If we lose China this market is going to have a problem
because OPEC just cannot cut enough to offset the US and Brazilian position,
and some of the other reservoirs at work,” said John Kilduff, partner at Again
Capital.
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