Tensions in the Middle East have not diminished. Such tensions often raise oil prices, but fuel has actually become cheaper this week.
Expectations of lower global oil demand and an increase in oil inventories will weigh more heavily on oil prices this period. In this month's new oil market report published on Tuesday, August 13, the International Energy Agency (IEA) indicates that oil market volatility has reached Olympic proportions in recent weeks. A joke to the just ended Games, but anyone who looks at the graph will see that there is indeed a lot of movement in the benchmark.
On July 4, Brent crude was trading at $87,43 per barrel before falling in fits and starts to $76,30 on August 5, a price drop of 12,7%. This was followed by a steep climb, fueled by the threat of an attack on Israel, reaching an oil price of $12 on Monday, August 82,30 (+7,9%).
OPEC lowers forecast of rising oil demand
That increase was reversed again on Tuesday and Wednesday to a decline of 3% (to $79,85), after OPEC on Monday slightly reduced its forecast for global demand growth for this and next year. It is the first time since July last year that the oil cartel has adjusted its growth forecast downwards. For 2024 this is 135.000 barrels per day. Projected demand for 2024 now totals 2,1 million barrels of oil daily. For 2025, the forecast has been reduced by 65.000 barrels per day to a demand of 1,8 million barrels per day.
The reason behind the reduction is the Chinese economy. This continues to lag behind and with it the demand for oil in the country. According to some analysts, OPEC's modest cut does not sufficiently reflect the weak Chinese economy. According to the oil cartel's latest forecast, the economy of the Asian country should grow much faster in the remainder of this year than has been the case so far in 2024. And that is doubtful.
IEA: Oil supplies will increase by 2025 barrels per day in 860.000
The publication had an impact on the Brent benchmark. Also from the International Energy Agency (IEA). bearish news. The leading organization expects international oil supplies to increase by an average of 860.000 barrels of oil per day next year. Even if the OPEC countries maintain the current production limits that they have imposed on themselves. The OPEC countries (and their affiliated countries that together fall under the name OPEC+) are struggling with whether or not to increase production from October.
About 2024 million more barrels per day would be produced in 2025 and 1,5. According to the agency, this will more than cover global demand. According to the IEA, three quarters of the additional oil produced comes from the non-OPEC countries Guyana, Canada and Brazil and the United States.
The diesel price has risen again from a dip a week ago towards €126 per 100 liters. That is lower than at the beginning of July when diesel cost approximately €132 per 100 liters.