OPEC’s Grim Forecast: WTI Oil Plummets $2.96 as Global Demand Takes a Hit
WTI Oil Price Closes Up Over 4% After OPEC Cuts Forecast
The West Texas Intermediate (WTI) crude oil contract in New York closed up more than 4% on Tuesday (September 10) after the Organization of the Petroleum Exporting Countries (OPEC) cut its forecast for global oil demand in 2020. This year and the next year
- The WTI crude oil contract will be delivered in October. It rose $2.96 or 4.31 to close at $65.75/barrel.
- The Brent crude oil contract (BRENT) will be delivered in November. It fell $2.65 or 3.69% to close at $69.19/barrel. This is the lowest closing level since December 2021
OPEC predicts that global demand for oil in 2024 will increase by 2.03 million barrels per day. A decrease from the previous forecast that it would increase by 2.11 million barrels per day. And it is expected that the demand for oil in 2025 will increase by 1.74 million barrels per day. A reduction from the original expected increase of 1.78 million barrels per day.
OPEC has cut its oil demand forecast for the second time in two months due to concerns about demand from China. It is the world’s largest importer of crude oil.
OPEC’s cut in oil demand forecasts overshadowed positives from a report by the US Federal Bureau of Safety and Environmental Enforcement (BSEE), which said Tropical Storm Francine had intensified as it passed through the Gulf of Mexico. As a result, many energy companies have had to stop around a quarter of their offshore crude oil production.
Oil production in the Gulf of Mexico in the United States accounts for about 15% of total domestic oil production. and produces natural gas in the proportion of 2% of the total natural gas production in the country.
The US National Hurricane Center predicts that Tropical Storm Francine will likely intensify into a hurricane. While the latest report says that Exxon Mobil, Shell and Chevron have evacuated workers from offshore drilling rigs and suspended some oil and gas operations in the Gulf of Mexico.
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