Oil Prices Dip Amid Fresh Demand Concerns
Oil prices have dropped, ending a five-day streak of gains, due to concerns about demand. OPEC has reduced its global demand growth forecast for 2024 from 2.25 million barrels per day (bpd) to 2.11 million bpd, citing softer expectations in China. This adjustment underscores the challenge for the OPEC+ group in raising production from October.
The global benchmark Brent crude futures fell by 41 cents, or 0.5%, to $81.89 a barrel, while U.S. West Texas Intermediate crude futures declined to $79.63 a barrel. The drop in oil prices coincides with an escalating Middle East conflict, with the U.S. preparing for potential attacks by Iran or its proxies, which could impact global crude supplies and lead to embargoes on Iranian crude exports.
In addition, money markets are anticipating a 25- or 50-basis-point cut in U.K. interest rates in September, with some expecting a total easing of 100 basis points by 2024. The U.K. consumer price index report, due soon, is also being closely watched for its implications on inflation and economic activity.
