Oil prices fell 2% on Monday after Chinese stimulus plans failed to impress traders and oil alliance OPEC cut its demand forecast.
West Texas Intermediate crude (CL=F) closed at $73.83 a barrel, while Brent crude (BZ=F), the global benchmark, settled at $77.46.
The declines came after an expected comment from China’s Finance Minister over the weekend lacked specific details, including the size of the country’s stimulus needed to increase demand for crude oil by the world’s largest oil importer.
“They’re not clear about what they’re going to do,” Dennis Kessler, senior vice president of trading at BOK Financial, told Yahoo Finance.
Adding to the pressure on Monday’s prices were the latest oil demand forecasts issued by the Organization of the Petroleum Exporting Countries.
OPEC lowered its forecasts for the third month in a row. The group now expects demand to grow by 1.9 million barrels per day this year, down from 2 million in its previous forecast, according to its monthly report. a report.
For 2025, the oil alliance expects demand to grow by 1.6 million barrels per day, compared to the previous forecast of 1.7 million barrels.
Crude oil futures rose nearly 8% this month amid speculation that Israel may target Iranian oil production amid escalating tensions in the Middle East.
Markets took into account the risk of disruption not only to Iran’s oil supply of 3 million barrels of crude oil per day, but also to shipments along the Strait of Hormuz, a transit point for crude oil in the region.
Earlier this month, Brent crude rose above $80 a barrel, its highest level since August, in anticipation of Israeli retaliation against Iran following Tehran’s missile strike.
Since then, futures have retreated from that peak as the United States signaled its reluctance to launch a retaliatory attack against Iranian oil fields.
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