Investing.com — Oil prices fell sharply on Monday after OPEC lowered its demand growth forecasts, raising worries about the Chinese economy, the world’s largest crude importer.
As of 08:35 ET (12:35 GMT), Brent oil futures dropped 1.9% to $77.57 per barrel, and West Texas Intermediate crude declined 2% to $74.05 per barrel.
OPEC Cuts 2024 Demand Growth Forecast Again
OPEC reduced its global oil demand growth forecast for 2024 for the third straight month, projecting an increase of 1.93 million barrels per day (bpd), down from 2.03 million bpd.
The downgrade was largely due to a lower growth forecast for China, now estimated at 580,000 bpd instead of 650,000 bpd.
China’s Economic Signs Struggle
Recent Chinese data showed unexpected easing in consumer inflation and continued producer inflation contraction, indicating persistent deflation issues that negatively affect demand.
Market sentiment was further impacted by vague plans for fiscal stimulus from China’s finance ministry, disappointing traders who were hoping for more decisive economic support.
Tensions in the Middle East Persist
Crude prices also reacted to calls for a ceasefire in the Middle East conflict between Israel and Hezbollah. Ongoing tensions have kept traders on edge, as any escalation could impact oil supplies and prices.
Recent conflicts have resulted in a risk premium attached to oil prices, increasing them amid fears of further disruptions.
(Ambar Warrick contributed to this article.)
`
