Oil Maintains Its Lows As OPEC Again Downgrades Global Demand Growth

Meanwhile, the bulls may be galvanized by Trump's expected pressure against Iran: File Image/Pixabay

Oil prices on Tuesday continued to hover near a two-week low as bearish trading sentiment was reinforced by the one-two punch of China's economic stimulus package and the latest demand growth  revision from the Organization of the Petroleum Exporting Countries (OPEC).

As of 1557 GMT, Brent rose 16 cents to $71.99 per barrel, while West Texas Intermediate rose 12 cents to $68.16.

In its latest monthly report published on Tuesday, OPEC said world oil demand would rise by 1.82 million barrels per day (BPD) this year, down from 1.93 million bpd the cartel predicted in October; up until August, OPEC had left its outlook unchanged since July 2023.

OPEC cited the ongoing economic woes in China as well as in India and other regions for its downward revisions.

Meanwhile, the latest Platts OPEC+ survey from S&P Global Commodity Insights showed that crude-oil output from OPEC+ rose 30,000 bpd month on month in October; S&P stated that the lack of full compliance with production targets could "continue to fray relations within OPEC+," and that the cartel is battling to put a floor on prices "while maintaining its market share amid tepid Chinese demand, elevated production in non-OPEC+ countries in the Americas, fears of a supply glut in 2025, and considerable volatility driven by wars in the Middle East and Europe."

Oil trading on Tuesday also continued to be affected by an earlier report that China's consumer prices rose at the slowest pace in four months in October while producer price deflation deepened, despite Beijing unveiling a 10 trillion yuan ($1.40 trillion) debt package to ease local government financing strains by repairing municipal balance sheets and stabilize sputtering economic growth.

Jon Byrne, analyst at Strategas Securities, remarked, "It'll be a choppy trade in the mid-60s to mid-70s until the market gets more clarity on the driving narratives."

But Bloomberg offered at least a sliver of hope for more vigorous trading in the foreseeable future: it stated that "In one bright spot for bulls, President-elect Donald Trump is expected to name Marco Rubio as secretary of state….the Florida senator has previously supported a maximum-pressure campaign against Iran and an emboldened Israeli response to threat's from OPEC's largest producer."