Crude Oil Futures Hit Lowest Levels Since 2021 Amid Demand Concerns

AFRICAN STOCKS AND FINANCESeptember 12, 2024 at 12:20 PM UTC

TLDR

Crude oil futures hit lowest levels since December 2021 due to OPEC's demand forecast revision and concerns over softening demand from China.
West Texas Intermediate (WTI) for October delivery settled at $65.75 per barrel, down 4.3%, while Brent crude for November delivery fell 3.69% to $69.19 per barrel.
OPEC revised downward its 2024 demand growth forecast to 2 million barrels per day, with a reduction of 80,000 bpd from the previous projection, also citing weakened Chinese demand.

Crude oil futures closed at their lowest levels since December 2021 on Tuesday as market sell-offs intensified following OPEC’s second downward revision of its demand forecast in two months.

Concerns over softening demand from China and OPEC's revised outlook weighed heavily on the market. West Texas Intermediate (WTI) for October delivery settled at $65.75 per barrel, down 4.3%, marking an 8.2% decline year to date. Brent crude for November delivery fell 3.69% to $69.19 per barrel, pulling back 10.2% for the year.

OPEC now expects demand to grow by 2 million barrels per day (bpd) in 2024, down 80,000 bpd from its previous forecast. The group also lowered its 2025 forecast, citing weakened Chinese demand, which has declined 3% in 2024 due to rising electric vehicle sales.

Key Takeaways

The oil market continues to face headwinds, with falling demand from China and OPEC’s reduced outlook driving prices to two-year lows. Despite potential disruptions from Tropical Storm Francine in the US Gulf, the bearish trend is expected to persist as OPEC+ prepares to increase production. Concerns about oversupply and lower demand growth in 2024 and beyond suggest continued market volatility.

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