OPEC cuts oil demand forecast as Chinese economy slows
Oil prices on the New York fuel exchange are slightly rising; however, they remain close to the lowest levels noted this month. According to brokers, investors are focused on the fuel demand outlook after OPEC countries lowered their oil demand growth forecasts for this year and next.
On NYMEX in New York, a barrel of West Texas Intermediate oil for December delivery costs CAD 95.22, representing a 0.16 percent increase.
Brent oil on ICE for December is priced at CAD 100.47 per barrel, following an increase of 0.18 percent.
Oil prices in the US near lowest levels
Investors are focusing on the fuel demand outlook after OPEC countries lowered their oil demand growth forecasts for this year and 2025 on Tuesday. This marks the fourth consecutive time this has occurred, indicating a slowdown in the Chinese economy, which is the world's largest oil importer.
OPEC's monthly report projects that world oil consumption will increase by 1.8 million barrels per day in 2024, 107,000 barrels less than previously projected.
According to OPEC estimates, daily oil demand is expected to increase by 1.5 million barrels per day in 2025, 103,000 barrels less than the cartel's previous forecast.
The cartel anticipates world oil consumption will average 104 million barrels per day this year.
However, OPEC highlights weaker fuel demand in Asian countries, including China and India, as well as in Africa.
Since July, OPEC has already reduced its forecasts for world oil demand for this year by nearly 20 percent.
However, OPEC's forecasts are more optimistic than those of other institutions, such as Wall Street banks and brokerage firms.
The world watches China
Meanwhile, Brent oil contract prices have dropped by about 18 percent since early July, as investors grow increasingly uncertain regarding the potential impact of the ongoing conflict in the Middle East, which has lasted for over a year, on oil supplies from the region.
The uncertainty surrounding the Chinese economy, where fuel demand has declined for several consecutive months, remains a focal point for investors as the country's authorities face numerous serious challenges in their attempts to "revive the economy."
- The absence of a more direct fiscal stimulus out of China has been casting a shadow on oil demand outlook, coupled with the prospects of higher US oil production with a Trump presidency and looming OPEC+'s plans for an output raise - said Jun Rong Yeap, market strategist at IG Asia Pte.
