International crude oil prices crashed to a 33-month low (near a three-year low) on Tuesday, September 10, with the benchmark Brent crude futures sinking below $70 a barrel for the first time since December 2021. This came shortly after the Organisation of Petroleum Exporting Countries and its allies (OPEC+) slashed its global oil demand forecast for this year and 2025.
Brent crude futures were down $2.33, or 3.24 per cent, at $69.51 a barrel. US West Texas Intermediate crude lost $2.50, or 3.64 per cent, to $66.21. On Monday, both benchmarks had risen about one per cent. Back home, crude oil futures last traded 4.19 per cent lower at ₹5,534 per barrel on the multi-commodity exchange (MCX).
Crude oil near three-year low: What’s weighing on prices?
-On Tuesday, OPEC said in its monthly report that the world oil demand will rise by 2.03 million barrels per day (bpd) in 2024, down from last month’s forecast for growth of 2.11 million bpd. Until last month, OPEC had kept the forecast unchanged since it was first made in July 2023.
OPEC also cut its 2025 global demand growth estimate to 1.74 million bpd from 1.78 million bpd. Oil prices slid on the weakening global demand prospects and expectations of oil oversupply with the Libya deal and group output.
On Monday, Chinese data showed consumer inflation accelerated in August to its fastest in half a year, though domestic demand remained fragile, and producer price deflation worsened. Data released on Tuesday showed China’s exports grew in August at their fastest in nearly 1 1/2 years, yet imports disappointed, with domestic demand depressed.
Analysts said OPEC cannot cut enough to offset the US and Brazilian positions and some of the other reservoirs at work. The US National Hurricane Center said tropical Storm Francine barrelled across the Gulf of Mexico and was on track to become a hurricane on Tuesday.
-Exxon Mobil, Shell and Chevron removed offshore staff and halted some oil and gas operations at facilities in the Gulf of Mexico. Exxon cut production at its Hoover oil facility about 150 miles east of Corpus Christi, Texas.
-Oil major Chevron withdrew workers from four offshore facilities and halted oil and gas output at two. Shell cut production at one platform, moved workers off three facilities and paused drilling at two. The production shut-ins have failed to offset weak demand sentiment.