Benchmark Brent has been trading below $70 as OPEC cuts its demand growth forecast

Crude prices plummeted on Tuesday after OPEC cut its demand growth forecast for this year and the next, the producer group’s second consecutive downward revision.

Global benchmark Brent was down 3.7%, at $69.08 a barrel as of 18:30 GMT. It marks the first time that Brent has been trading below $70 since December 2021. The US crude benchmark, West Texas Intermediate (WTI), nosedived over 4% at $65.72 per barrel. WTI crude futures hit their lowest levels since May 2023.

OPEC said in a monthly report on Tuesday that world oil demand would rise by about two million barrels per day (bpd) in 2024, some 80,000 bpd slower than its previous forecast.

Until last month, OPEC had kept the forecast unchanged since it was first made in July 2023.

The world’s largest crude importer, China, accounted for the bulk of the latest downgrade, with OPEC trimming its forecast on the country’s demand growth in 2024 to 650,000 bpd.

“Looking ahead, China’s economic growth is expected to remain well supported,” OPEC said.

“However, headwinds in the real estate sector and the increasing penetration of LNG trucks and electric vehicles are likely to weigh on diesel and gasoline demand going forward,” the report warned.

OPEC also cut its 2025 global demand growth estimate to 1.74 million bpd from a previously projected 1.78 million bpd.

According to the report, demand for crude from the Organization of Petroleum Exporting Countries and allies, known as OPEC+, is expected at 43.8 million bpd in the fourth quarter.

READ MORE: Libya oil production halted over central bank power struggle

Seeking to shore up the market amid tepid growth in oil demand and geopolitical tensions across the globe, the group has made a series of deep output cuts since late 2022. In June, OPEC+ cut output by 130,000 bpd to 40.87 million bpd. Last month, it agreed to extend most of the production cuts well into 2025, with additional voluntary cuts of 2.2 million bpd continuing until September this year.

The group was due to start unwinding the most recent cuts from October, but decided last week to delay the plan for two months as oil prices have slumped.