Crude Oil Dips 2% Amid OPEC Demand Worries and China’s Economic Jitters | Urgent Commodities Update
Oil prices fell by over 2% on Monday, erasing last week’s gains, as OPEC cut its 2024 and 2025 global oil demand growth forecasts due to continued reductions in China’s oil imports for the fifth consecutive month. Brent crude futures dropped by $1.72 (2.2%) to $77.34 per barrel, while U.S. West Texas Intermediate crude decreased by $1.72 (2.28%) to $73.82 per barrel.
OPEC’s revision marked its third straight cut in demand projections, with the largest hit coming from China, the world’s biggest oil importer, whose growth forecast was reduced from 650,000 barrels per day (bpd) to 580,000 bpd. China’s crude imports fell nearly 3% for the first nine months of the year, attributed to the rise of electric vehicles and slower post-pandemic economic growth.
Additionally, China’s deflationary pressures intensified in September, adding to investor uncertainty despite talks of a stimulus package. “The lack of a clear timeline and measures to address structural issues, like weak consumption, adds uncertainty,” stated Mukesh Sahdev of Rystad Energy.
Market concerns over potential Israeli strikes on Iranian oil infrastructure, following tensions in the region, were overshadowed by China’s economic issues. The U.S. responded by sending troops to Israel to support air defenses, while urging Israel to avoid escalating conflict in the Middle East.
The dollar reached a nine-week high, potentially curbing demand for oil purchased in other currencies due to increased costs, further impacting oil prices.
Original Story https://www.business-standard.com/markets/commodities/crude-oil-falls-2-as-opec-cuts-oil-demand-growth-view-china-concerns-124101401305_1.html
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