Oil futures: Brent tumbles below $70/b as OPEC, EIA slash forecasts

Quantum Commodity Intelligence – Brent crude futures slumped below $70/b Tuesday for the first time since late 2021 as both OPEC and EIA revised their forecasts for oil demand growth lower. 

Front-month Nov24 ICE Brent futures were trading at $69.25/b (1721 GMT), compared to Monday's settle of $71.84/b.

At the same time Oct24 NYMEX WTI was trading at $65.86/b versus Monday's settle of $68.71/b.

OPEC made further downward revisions to its forecast for global oil demand growth on Tuesday, lowering its oil demand growth estimate for 2024 by 80,000 bpd to 2.03 million bpd citing weaker than expected oil consumption in China. 

Its 2025 forecast was cut by 40,000 bpd to 1.74 million bpd.

It comes just over a week after the group decided to delay hiking output, which only partly addressed the supply/demand balance.

"While OPEC+ cuts leave the market a bit tighter for the remainder of this year, this doesn't resolve the surplus that is expected next year," said Warren Patterson, head of ING's commodity research.

The EIA added to the bearish tone with its own revision Tuesday. It now sees global oil demand at 900,000 bpd in 2024, down as much as 200,000 bpd from its August forecast.

The US government agency pegged demand growth at 1.5 million bpd next year, down 100,000 bpd from a month ago.

Hurricane

Prices had rebounded from yearly lows in the previous session on concerns that Tropical Storm Francine could reach hurricane status as it heads for an expected landfall in Louisiana.

Several oil refineries and petrochemical plants are located in the New Orleans area, while Louisiana is a major exporter of LNG, including Cheniere's Sabine Pass plant and the Sempra-operated Cameron.

The state also hosts Port Fourchon, which acts as a significant energy hub for southeast Louisiana, which was closed for several weeks in 2021 after taking a direct hit from Hurricane Ida.