Nov’24 Brent futures flat price has plunged below $70/bbl this afternoon for the first time since December 2021, pricing at $71.20/bbl at 12:00 BST and reaching a high of $71.81/bbl at 14:30 BST, before diving down to $68.97/bbl at 17:30 BST (time of writing). The sell-off may have been exacerbated by a large number of longs stopping out, especially as prices fell below the $70/bbl psychological level. This comes amid expectations of ample supplies and demand concerns amid weak economic data out of vital economies such as China. In August, Chinese imports increased by just 0.5%, missing expectations for a 2% boost, and down from 7.2% growth a month prior. In the news today, OPEC lowered their global oil demand forecast for 2024 again from 2.11 mb/d to 2.03 mb/d. Until last month, OPEC kept the forecast unchanged since it was first made in July 2023. OPEC also cut its 2025 global demand growth estimate to 1.74 mb/d from 1.78 mb/d. Prices slid on the weakening global demand prospects and expectations of oil oversupply. Meanwhile, the EIA’s forecast for Brent crude oil prices reaching $84.44/bbl in 2024 has been lowered to $82.80/bbl. Correspondingly, their forecast for 2025 has been reduced from $85.71/bbl down to $84.09/bbl. Finally, Tropical Storm Francine continues to barrel across the Gulf of Mexico and is on track to become a hurricane this week. Still, we have yet to see any robust indication of how this hurricane could impact US oil supplies. At the time of writing, the front month (Nov/Dec’24) and six-month (Nov/May’25) Brent futures spreads are at $0.42/bbl and $0.96/bbl, respectively.
