By Adedapo Adesanya
The latest downward review of demand growth forecast by the Organisation of the Petroleum Exporting Countries (OPEC), a stronger US Dollar, and disappointment over China’s latest stimulus plan pushed the prices of crude oil grades higher on Tuesday.
Data showed that Brent futures were up 6 cents or 0.1 per cent to $71.89 a barrel and the US West Texas Intermediate (WTI) futures appreciated by 8 cents or 0.1 per cent to settle at $68.12 per barrel.
OPEC cut its forecast for global oil demand growth in 2024 and lowered its projection for next year, marking the producer group’s fourth consecutive downward revision.
The group said world oil demand would rise by 1.82 million barrels per day in 2024, down from growth of 1.93 million barrels per day forecast last month.
Until August, OPEC had kept the outlook unchanged since its first forecast in July 2023.
In the report, the oil cartel also cut its 2025 global demand growth estimate to 1.54 million barrels per day from 1.64 million barrels per day.
China accounted for the bulk of the 2024 downgrade. OPEC trimmed its Chinese growth forecast to 450,000 barrels per day from 580,000 barrels per day and said diesel use in September fell year-on-year for a seventh consecutive month.
The group was to start unwinding the most recent layer of cuts of 2.2 million barrels per day from December but said on November 3 it would delay the plan for a month, as weak demand and rising supply outside the group maintain downward pressure on the market.
OPEC’s output is also rising, the report showed, with Libyan production rebounding after being cut by unrest. OPEC+ pumped 40.34 million barrels per day in October, up 215,000 barrels per day from September.
The International Energy Agency (IEA), which represents industrialised countries, sees demand growth of 860,000 barrels per day in 2024. The agency is scheduled to update its figures on Thursday.
The market still continues to look at China after it unveiled a $1.4 trillion debt package to ease local government financing strains but analysts said the plan fell short of the amount needed to boost economic growth.
Also, US President-elect Mr Donald Trump, who won the November 5 election, remains a factor for oil.
The former US president has threatened more tariffs on Chinese goods, showing a constant policy direction like during his first stint in power.
Also weighing on oil prices, the US Dollar rose to a four-month high versus a basket of currencies as investors kept piling into trades seen benefiting from Trump’s victory. A stronger greenback makes oil more expensive in other countries, which can reduce demand.