Oil prices slide to 3-month trough on grim outlook for global demand

Economies.com
2024-05-15 14:37PM UTC

Global oil prices skidded in American trade on Wednesday to three-month lows, sharpening losses for the second straight session on grim outlook for global demand, after the International Energy Agency reduced its outlook for global demand this year. 

 

Such developments overshadowed initial data that showed a large US crude inventory drawdown last week.

 

Prices

 

US crude fell 2.2% to $72.72 a barrel, the lowest since February 26, with a session-high at $78.71. 

 

Brent fell 2% today to $81.08 a barrel, the lowest since February 26, with a session-high at $83.03. 

 

US crude lost 1% on Tuesday, while Brent  shed 0.8% amid growing concerns about global demand.

 

Global Demand 

 

The International Energy Agency said in its April report that it expects global oil demand to grow by 1.1 million bpd this year, down 140 thousand bpd from the previous month’s forecasts as demand from developed economies decline. 

 

The EIA also reported an increase of global crude inventories in March by 34.6 million barrels as trade disruptions led to a sharp increase in oil stocks inside cargo ships. 

 

Conversely, OPEC expects global oil demand to increase by 2.25 million bpd this year, same as March forecasts. 

 

The organization also expects total OPEC+ production to fall by 48 thousand bpd in April to 26.575 million bpd.

 

US Stocks 

 

Initial data from the American Petroleum Institute showed US crude stocks fell by 3.1 million barrels in the week ending May 10, passing estimates of a 1.4 million barrels drawdown. 

 

Now traders await official data on US crude stocks from the EIA later today, expected to show a drop of 0.4 million barrels. 

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