HOUSTON: Oil prices declined about 2% on Monday, wiping out all of last week’s gains, as OPEC’s lowering of its 2024 and 2025 global oil demand growth view again added to concerns of weak fuel demand with China’s oil imports falling for a fifth month in a row.
China’s stimulus plans also failed to inspire investor confidence while markets continued to watch for potential Israeli attacks on Iranian oil infrastructure.
Brent crude futures were down $1.58, or 2.02%, at $77.44 per barrel by 10:37 a.m. ET (1437 GMT), while US West Texas Intermediate crude futures fell $1.64, or 2.17%, to $73.92 per barrel. Brent gained 99 cents last week, while WTI climbed $1.18. OPEC on Monday cut its forecast for global oil demand growth in 2024 and also lowered its projection for next year, marking the producer group’s third consecutive downward revision.
China, the world’s largest crude oil importer, accounted for the bulk of the 2024 downgrade as OPEC trimmed its growth forecast for the country to 580,000 barrels per day (bpd) from 650,000 bpd. China’s crude imports for the first nine months of the year were down nearly 3% from last year to 10.99 million bpd, data showed.
Declining Chinese oil demand from the growing adoption of electric vehicles (EV), as well as slowing economic growth following the COVID-19 pandemic, has been a drag on global oil consumption and prices. China’s deflationary pressures also worsened in September, according to official data released on Saturday.
A press conference the same day left investors guessing about the overall size of a stimulus package to revive the fortunes of the world’s second-largest economy.
“The lack of a clear timeline and the absence of measures to address structural issues, such as weak consumption and reliance on infrastructure investments, have only increased ambiguity amongst market participants,” noted Mukesh Sahdev, the global head of commodity markets-oil at Rystad Energy.
The negative news from China outweighed market concerns over the lingering possibility that an Israeli response to Iran’s Oct. 1 missile attack could disrupt oil production. The US said on Sunday it would send troops to Israel along with an advanced anti-missile system in a highly unusual deployment meant to bolster the country’s air defenses.
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