Oil prices dip as OPEC cuts demand forecast, economic cues awaited

Oil prices fell in Asian trade on Tuesday, reversing course from last week’s rebound as anticipation of a slew of economic cues this week sparked caution, while OPEC also cut its outlook on 2024 demand growth, Investing reported.

Prices had rebounded sharply from over seven-month lows as fears of a worsening conflict between Iran and Israel saw traders attach a greater risk premium to crude. Media reports said that an Iranian strike against Israel was likely to happen this week.

Brent oil futures expiring in October fell 0.4% to $81.94 a barrel, while West Texas Intermediate crude futures fell 0.4% to $77.98 a barrel by 21:35 ET (01:35 GMT).

OPEC cuts oil demand forecast

The Organization of Petroleum Exporting Countries (OPEC) said it expects oil demand to grow by 2.11 million barrels per day in 2024, down from earlier forecasts for growth of 2.25 million bpd.

In a monthly report released on Monday, the cartel cited increased doubts over China, as the country continued to struggle with a post-COVID economic rebound.

The lower demand forecast raised doubts over just how much scope there was in the OPEC’s plans to begin phasing out its production cuts.

The cut ramped up concerns over a slowdown in global oil demand this year, especially amid fears of sluggish demand in China, which is the world’s biggest oil importer.

Monday’s demand forecast cut comes just months before the cartel is set to meet and decide on the path of production in the coming months.