Investing.com -- Oil prices fell sharply Monday after OPEC cut its demand growth forecasts, amid concerns for the health of the Chinese economy, the largest crude importer in the world.
At 08:35 ET (12:35 GMT), Brent oil futures fell 1.9% to $77.57 a barrel, while West Texas Intermediate crude futures fell 2% to $74.05 a barrel.
OPEC cuts 2024 demand growth forecast, again
The Organization of the Petroleum Exporting Countries cut its forecast for global oil demand growth in 2024 Monday, the producer group's third consecutive downward revision.
In its monthly report, published earlier Monday, OPEC said world oil demand will rise by 1.93 million barrels per day (bpd) in 2024, down from growth of 2.03 million bpd it expected last month. China accounted for the bulk of the 2024 downgrade as OPEC trimmed its Chinese growth forecast to 580,000 bpd from 650,000 bpd.
The group also reduced its 2025 global demand growth estimate to 1.64 million bpd from 1.74 million bpd.
China disinflation persists, fiscal stimulus underwhelms
Chinese data released over the weekend showed consumer inflation unexpectedly eased in September, while producer inflation marked nearly two years of contraction.
The reading pointed to a sustained deflationary trend in the world’s biggest oil importer, which bodes poorly for demand.
Middling signals on plans for more stimulus also battered sentiment. China’s finance ministry said over the weekend that it planned to unlock more fiscal stimulus, but provided scant cues on the timing or scale of the measures.
This largely underwhelmed markets, given that traders were already impatient with Beijing’s languid approach to doling out more economic support.
China had in late-September announced a slew of monetary stimulus measures to support the economy. But enthusiasm over these measures also wore thin.
China has been a main point of contention for oil markets, as the world’s biggest oil importer struggles with sustained deflation and softening economic growth.
Middle East tensions remain
Crude prices were also hit by chatter over a potential ceasefire in the Middle East, after Lebanese Prime Minister Najib Mikati called for an immediate ceasefire between Israel and Hezbollah.
The Middle East conflict remained squarely in focus for oil markets,.
Concerns over an escalation in the conflict saw oil prices clock two weeks of strong gains.as aggression between Israel and Hezbollah showed little signs of easing, while the Israel-Hamas war marked a one-year anniversary earlier in October.
Fears of an escalation in the conflict, especially if Israel attacks Iran’s oil facilities, were a key boost to crude prices in recent weeks, as traders attached a greater risk premium to oil.
(Ambar Warrick contributed to this article.)