Crude oil futures fell more than 4% on Tuesday, as the looming global oil surplus next year eclipsed the risk of a supply disruption due to the conflict between Israel and Iran.
Oil prices soared earlier this month after Iran hit Israel with a ballistic missile attack, raising fears that Israel would respond by targeting the Islamic Republic’s oil facilities.
The International Energy Agency said Tuesday its members were ready to act in the event of a supply disruption in the Middle East.
“For on the spot, supply continues to circulate and, in the absence of major disruption, the market will face a vital surplus for the new year,” the IEA said in its monthly report.
Here are today’s energy prices as of around 5:30 a.m. ET:
- West Texas Intermediate November contract: $70.28 per barrel, down $3.55 or 4.9%. Since the start of the year, US crude oil has fallen 2%.
- Brent December contract: $73.81 per barrel, down $3.65 or 4.8%. Since the start of the year, the global benchmark is down about 4%.
- Essence RBOB November contract: $2.0197 per gallon, down 4.2%. Since the start of the year, gasoline has fallen by almost 4%.
- Natural gas November contract: $2.465 per thousand cubic feet, down 1.16%. Since the start of the year, gas has fallen almost 2%.
Global oil demand is expected to grow by just under 900,000 barrels per day in 2024 and 1 million bpd in 2025, a significant slowdown from growth of 2 million bpd over the past year. of the post-pandemic period, according to the IEA.
Chinese oil demand is particularly weak, with consumption down 500,000 b/d in August, the fourth consecutive monthly decline, according to the agency. At the same time, crude oil production in the Americas, led by the United States, is expected to grow by 1.5 million bpd this year and next, the IEA said.
OPEC has lowered its oil forecasts for 2024 for the third month in a row.
