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Oil prices held steady near two-week lows on Wednesday, following OPEC’s downgrade of its global oil demand growth forecast for 2024 and 2025. Concerns over faltering demand in China also contributed to a cautious market sentiment.
As of 10:40 GMT, Brent crude futures had risen by 49 cents, or 0.68%, to $72.38 per barrel, while U.S. West Texas Intermediate (WTI) crude futures increased by 48 cents, or 0.70%, to $68.60 per barrel. Despite these gains, the overall sentiment remained subdued due to a combination of factors impacting the market.
Oil prices have experienced significant declines recently, largely driven by a stronger U.S. dollar following Donald Trump’s election victory, underwhelming Chinese economic stimulus efforts, and OPEC’s continued downward revisions of demand forecasts. OPEC’s latest revision on Tuesday marked the fourth consecutive cut for its 2024 global oil demand growth projection, attributing the reduction to economic challenges in major consumers such as China and India.
Although oil prices saw a slight 0.1% uptick on Tuesday, this came after a sharp 5% decline over the preceding two sessions. The International Energy Agency (IEA) is expected to release its updated demand forecast on Thursday, which could further influence market dynamics.
On the supply side, concerns persist about potential disruptions stemming from geopolitical tensions, particularly involving Iran. Barclays has highlighted the possibility of supply disruptions if conflicts between Iran and Israel escalate. Additionally, the expected appointment of U.S. Senator Marco Rubio, known for his hardline stance on Iran, as secretary of state under President Trump could also impact oil prices. Rubio’s aggressive views could lead to renewed sanctions on Iran, potentially removing around 1.3 million barrels per day from the global oil supply, according to analysts.
Iran’s oil minister stated that the country is prepared to sustain its oil production and exports in the face of potential U.S. restrictions, as reported by Shana, the ministry’s news outlet.
Investors are also awaiting data from the American Petroleum Institute (API) due later on Wednesday. Analysts anticipate a modest increase of 100,000 barrels in U.S. crude inventories for the week ending November 8, which could further influence price movements.
