Crude oil prices have dropped nearly 9% from an early October high of $80.35 per barrel, with Brent crude struggling to stay above $75 as OPEC lowers its global oil demand forecast for the fourth time.
On October 14, OPEC lowered its projection for global oil demand growth in 2024, predicting a rise of 1.93 million barrels per day (bpd), down from its earlier estimate of 2.03 million bpd in the previous month.
This adjustment likely signaled a shift in market sentiment, setting the stage for a downward trajectory in oil prices.
Brent Oil futures, which peaked at $80.35 per barrel on October 7, fell to $72.55 per barrel by the end of the month.
Although crude oil futures briefly rallied to $75.53 per barrel in early November, prices soon fell back to the $72 range after OPEC issued another downgrade on November 12, lowering its demand forecast to 1.82 million bpd.
Crude oil prices have faced persistent challenges in maintaining a long-term upward trend, mirroring a prolonged market retracement that lingered in the previous year.
The futures started the year at $80.55 per barrel, supported by a modest uptrend that carried through to April, with each month closing slightly above its opening price.
However, bearish pressure began to emerge in May, with Brent trading at higher volumes of 6.4 million units but failing to hold gains.
Except for a modest positive close in June, the period from July to September saw steady declines, culminating in a September close at $71.70 per barrel.
Despite a short-lived recovery in October, OPEC’s revised outlook on October 14 likely rekindled the bearish momentum, dragging prices down to $71.89 by November 12.
OPEC has now cut its global oil demand forecast for four consecutive months, citing lower-than-expected economic recovery and sluggish demand, particularly in China.
The producer group revised its 2024 demand growth estimate on November 12 to 1.82 million bpd, down from 1.93 million bpd last month. Additionally, OPEC lowered its 2025 global demand growth projection to 1.54 million bpd, a decrease from the 1.64 million bpd forecasted earlier.
Investor confidence has likely been further shaken by uncertainty over China’s economic outlook, as Beijing’s introduction of a 10-trillion-yuan ($1.4 trillion) debt relief package seemed low to investors and analysts.
Global investor sentiment has shifted from commodities like oil and gold to traditional assets such as equities, currencies, and cryptocurrencies, with strong-dollar rhetoric from former U.S. President Donald Trump adding pressure.
A London-based commodity analyst noted that OPEC is striving to maintain Brent crude prices above $70 per barrel, despite lackluster demand from China.
“With China’s appetite for crude remaining subdued, OPEC’s supply-side adjustments are only managing to hold the Brent price floor at $70,” the analyst stated.
For now, oil markets remain tense, caught between OPEC’s interventions, weakening demand, and shifting macroeconomic dynamics.
