During Tuesday’s Asian hours, the price of West Texas Intermediate (WTI) oil is trading at about $71.10 per barrel, continuing its downward trend for the third straight session.
Following a media report indicating that Israel is likely to forego attacking Iranian oil installations, allaying fears of possible supply disruptions, crude oil prices are under pressure to decline.
Benjamin Netanyahu, the prime minister of Israel, told the United States (US) on Monday that Israel will attack Iranian military targets instead of nuclear or oil facilities, according to the Washington Post.
Following Israel’s announcement that it will retaliate against an Iranian missile attack, investors were alarmed about supply issues, which caused oil prices to rise last week.
Following the publication of the OPEC Monthly Market Report, which updated its forecast for the increase of global oil demand in 2024 and 2025, crude oil prices fell by almost 5% on Monday.
In October, OPEC also lowered its prediction for China’s rise in crude oil demand for the third consecutive month, pointing to slow economic development and the expanding use of electric vehicles as major contributing factors.
The Monthly Oil Market Report (MOMR) from the Organization of the Petroleum Exporting Countries (OPEC) predicts a 580,000 barrels per day (bpd) increase in China’s crude oil consumption in 2024.
This projection falls short of the 650,000 barrels per day increase OPEC predicted in September and also falls short of the 760,000 barrels per day increase OPEC predicted in July for the world’s largest oil importer.
China’s growing deflationary pressures have sparked worries about slowing economic growth, which has caused oil market sentiment to turn negative.
Uncertainty surrounding the magnitude of recent stimulus plans has further undermined traders’ confidence, raising concerns about potential negative effects on China’s economic outlook.
Saudi Arabia may increase output as OPEC+ member unity deteriorates. OPEC+ producers have been producing up to 800,000 barrels of excess output daily despite voluntary production reductions.
The Saudi oil minister warned that if member nations do not follow through on the agreed-upon reduction, prices may drop to $50 per barrel.
