Crude Oil Prices Fall to Lowest Level of 2024 as OPEC Cuts Demand Outlook

Crude oil futures slipped roughly 4% in trading Tuesday after OPEC—a dominant coalition of oil-producing nations—cut back on its demand outlook and growth projections for this year and the next.

November contracts for Brent crude futures slipped to $68.68, a level not seen since May 2023, while October contracts for U.S. benchmark West Texas Intermediate Texas (WTI) dropped to $65.27, witnessed last in March 2023.

Oil prices have faltered in recent weeks because of geopolitical tensions and potential weather-related production changes. That prompted OPEC+, which comprises OPEC countries and others, including Russia, to delay its plan to boost oil production after a meeting last week.

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World oil demand is expected to grow by 2 million barrels per day (B/D) to about 104.2 million B/D in 2024, slightly lower than OPEC’s previous projection and the second downward revision to the number. The oil producers expect the demand to moderate further next year, growing at 1.7 million B/D.

And while oil demand seems to be slowing, OPEC said these levels were still far greater than the pre-pandemic historical average of 1.4 million B/D.

However, there are some concerns about the sustainability of demand from China, given the economic challenges the world’s second-largest consumer of oil is currently facing.

“Headwinds in the real estate sector and the increasing penetration of LNG trucks and electric vehicles are likely to weigh on diesel and gasoline demand going forward,” OPEC said about oil demand from China in its monthly report released Tuesday.

The resilience of U.S. consumers is helping oil as well. Despite some weakness in manufacturing demand, OPEC expects U.S. oil demand to grow in 2024, with upside potential coming from “ongoing support from steady private household consumption throughout 2H24.”