Oil prices fell slightly on Tuesday, August 13, to break a five-day winning streak as markets refocused on demand concerns after OPEC on Monday cut its forecast for demand growth in 2024 due to a weak outlook in China.
Brent crude futures fell 78 cents, or 0.95%, to $81.52 a barrel, while U.S. West Texas Intermediate (WTI) crude futures lost 73 cents, or 0.91%, to $79.33.
Brent crude rose more than 3% on Monday, while U.S. crude futures rose more than 4%.
OPEC forecasts
OPEC's downward revision of its forecast for global oil demand in 2024 highlighted the dilemma facing the wider OPEC+ alliance in increasing production from October.
OPEC's cut in its forecast for this year was the first since it announced it in July 2023, and comes after growing indications that demand in China has lagged behind expectations due to lower diesel consumption while a property crisis hobbles the world's second-largest economy.
Middle East Tensions
Meanwhile, the conflict in the Middle East is escalating as the United States braces for possible Iranian attacks in the region this week, White House National Security spokesman John Kirby said Monday.
Analysts said any attack could disrupt global crude supplies and send prices soaring. The attack could also prompt the United States to impose a ban on Iranian oil exports, potentially affecting supplies of 1.5 million barrels per day.
Inflation and the Fed's Decision
Markets are also awaiting the US Consumer Price Index report on Wednesday, which will give a crucial reading on inflation, and investors are now concerned that pessimistic data could raise fears of an economic slowdown.
CME's FedWatch tool showed that financial markets are betting on a 25-50 basis point cut in US interest rates in September, and expect 100 basis points of monetary easing by the end of the year.
