Oil prices continued their upward trend on Monday, August 12, 2024, with Brent crude reaching $80.37 per barrel and West Texas Intermediate (WTI) at $77.71. This marks the fifth consecutive session of price increases, maintaining gains of over 3% from the previous week. The rise is attributed to reduced concerns about a US recession and ongoing tensions in the Middle East.However, amidst this price surge, the Organization of Petroleum Exporting Countries (OPEC) has revised its global oil demand growth forecast downward for both 2024 and 2025. OPEC now expects global oil demand to grow by 2.1 million barrels per day in 2024, a reduction of 135,000 barrels per day from its previous forecast. For 2025, the growth expectation has been lowered by 65,000 barrels per day to 1.78 million barrels per day.The downward revision is primarily due to weaker-than-expected data for the first half of 2024 and softened expectations for China’s oil demand growth. Despite this adjustment, OPEC notes that global oil demand in 2024 remains significantly higher than the pre-COVID average of 1.4 million barrels per day.Market analysts are closely watching geopolitical developments, particularly in the Middle East. There are growing concerns about potential Iranian retaliation against Israel for the killing of key Hamas and Hezbollah leaders. This uncertainty has led traders to increase the risk premium on oil prices.The market also faces other factors that could influence prices, including the possibility of the oil market approaching a Contango state and the US Federal Reserve’s interest rate decisions. As the situation remains fluid, traders and analysts continue to monitor these developments closely, anticipating their potential impact on global oil supply and demand.
Key points
- Oil prices continue to rise, with Brent crude reaching $80.
- OPEC has lowered its global oil demand growth forecast for 2024 and 2025 due to weaker data from China and actual figures from early 2024.
- Ongoing tensions in the Middle East, particularly potential Iranian retaliation against Israel, are contributing to increased oil prices.
- Despite the downward revision, OPEC expects oil demand in 2024 to remain significantly higher than pre-COVID levels.
37 per barrel and WTI at $77.
71.
Contradictions👾While oil prices are rising due to reduced recession concerns and Middle East tensions, OPEC has lowered its demand growth forecast, creating a potentially conflicting market outlook.
