Oil Prices Plummet Below $70

11 Sep 2024 , 11:17 AM

Oil prices stabilised after rapidly rising fears about global demand triggered a sudden and violent selloff that pushed Brent oil below $70 per barrel for the first time in more than two years.

The benchmark has fallen by about a fifth this quarter on concerns that slowing growth in the biggest consumers, the United States and China, will reduce consumption at a time when supply are plenty and expanding. Market measures, notably the shape of the entire futures curve, show that conditions are rapidly becoming less tight.

Oil’s decline has already caused OPEC+ to postpone an output increase, raising investor concerns that the extra barrels will still be delivered to the market closer to 2025. The International Energy Agency, which will release a revised monthly outlook later this week, warned in August that even if the cartel cancelled the output rise, the market would still face greater stocks next year.

Brent, which traded above $69 per barrel, had a volatile session on Tuesday, with prices falling by more than 3% in a fresh wave of selling pressure following a sharp drop last week. It rose slightly on Wednesday after the American Petroleum Institute projected that US commercial stockpiles declined by roughly 2.8 million barrels last week, according to sources familiar with the data. Official data are due later on Wednesday.

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