WTI oil falls as OPEC lowers 2024 demand forecast to 1.82 million bpd
OPEC also reduced its 2025 global demand growth
On November 13, the price of the benchmark West Texas Intermediate (WTI) oil continued to fall, as the disappointment with Beijing's economic stimulus measures was compounded by news from OPEC.
The Organization of Petroleum Exporting Countries revised its global oil demand forecast downward.
In its monthly report, OPEC stated that global oil demand is expected to grow by 1.82 million barrels per day in 2024, down from the previous month's forecast of 1.93 million barrels per day.
OPEC also reduced its 2025 global demand growth estimate to 1.54 million barrels per day from 1.64 million barrels, marking the fourth consecutive downward revision by the oil cartel.
This data has put pressure on oil prices. At the time of writing, WTI was trading above $68, though it had dipped below this level during early Asian trading hours.
The strong dollar is also contributing to the drop in oil prices. Currently, the U.S. Dollar Index (DXY), a measure of the dollar's value relative to a basket of foreign currencies, has risen to new six-month highs, exceeding 106.00.
A stronger U.S. dollar indirectly increases the cost of oil, which is denominated in the American currency.
The China Factor
WTI prices are also being influenced by Donald Trump's victory in the presidential election. Trump announced his intention to impose a comprehensive tariff of between 10% and 20% on all imports, with additional tariffs of up to 60% on certain products imported from China.
On Wednesday, investors will be watching for the U.S. Consumer Price Index (CPI) inflation data for October, looking for a potential new impetus. Weak CPI data could help limit WTI losses.
Disappointment over China's latest stimulus plan is also undermining WTI prices, as China is the world's largest oil importer. Last week, China announced a 10 trillion yuan stimulus plan, but analysts fear this may not be enough.
The package does not include direct economic stimulus measures, and the latest published statistics also carry deflationary risks. This, in turn, has raised concerns about the potential reduction in oil consumption in China.
