Crude oil futures fell more than 4% on Tuesday as a looming global oil surplus next year overshadowed the risk of supply disruptions from the conflict between Israel and Iran.
Oil prices soared after Iran launched a ballistic missile attack on Israel earlier this month, raising concerns that Israel would respond by targeting the Islamic Republic’s oil facilities.
The International Energy Agency said on Tuesday its members were ready to take action if there were supply disruptions in the Middle East.
“Supplies are continuing to flow and, in the absence of major disruptions, the market will face a sizeable surplus in the new year,” the IEA said in its monthly report.
Here are energy prices today around 5:30 a.m. ET:
- West Texas Intermediate Oil November contract: US$70.28 per barrel, down US$3.55, or 4.9%. U.S. crude has fallen 2% so far this year.
- Brent December contract: US$73.81 per barrel, down US$3.65, or 4.8%. The global benchmark has fallen about 4% so far this year.
- RBOB gasoline November contract: $2.0197 per gallon, down 4.2%. Gasoline prices have fallen nearly 4% so far this year.
- natural gas November contract: $2.465/thousand cubic feet, down 1.16%. Natural gas prices have fallen nearly 2% so far this year.
The IEA predicts that world oil demand will grow by nearly 900,000 barrels per day in 2024 and 1 million barrels per day in 2025, a significant slowdown compared with the 2 million barrels per day growth in the post-epidemic period.
China’s oil demand has been particularly weak, with consumption falling by 500,000 barrels per day in August, the agency said, marking the fourth consecutive monthly decline. At the same time, the IEA said that crude oil production in the Americas, led by the United States, is expected to increase by 1.5 million barrels per day this year and next.
OPEC lowered its 2024 oil production forecast for the third consecutive month.
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