ALBAWABA – Oil prices recorded a drop while concerns about demand persist as markets are waiting for the US Consumer Price Index report to be issued tomorrow.
Oil prices fell
Oil prices decreased slightly today after 5 days of constant boost. Prices recorded a drop while markets are concerned about the demand after The Organization of the Petroleum Exporting Countries (OPEC) lowered its demand growth in 2024 on Monday amid weak expectations in China.
OPEC lowered its oil demand forecast for 2024, driven by the weak demand in China due to the low diesel consumption in the country. (Shutterstock)
Brent crude futures recorded a decrease of almost 78 cents, or 0.95% to $81.52 a barrel, while US West Texas Intermediate (WTI) crude futures fell by 73 cents, or 0.91% to $79.33, according to Reuters.
OPEC cuts oil demand growth
It is worth noting that OPEC lowered its oil demand forecast for 2024, driven by the weak demand in China due to the low diesel consumption in the country.
Middle East conflict
The recent conflict and escalations in the Middle East and the tension between Iran and the US are also contributing to the oil price fluctuation overall.
Analysts explained how possible attacks could disrupt global crude supplies and increase prices significantly. The US is expected to impose bans on Iranian oil exports, which could affect the supplies of 1.5 million barrels per day.
US Consumer Price Index report
On the other hand, markets are waiting for the US Consumer Price Index to be issued tomorrow. This report will provide details on the recent inflation and economic growth.
FedWatch, a tool provided by CME financial services company, expected a 25-50 basis point cut in US interest rates in September 2024 and a total easing of 100 basis points by the end of 2024.
It is worth mentioning that low interest rates boost economic activity, which in turn increases the consumption of energy sources like oil.
