Oil prices dropped 2% on Monday as OPEC reduced its global oil demand growth outlook for 2024 and 2025, while China’s oil imports fell for the fifth consecutive month. Brent crude futures settled at $77.46 per barrel, down $1.58 (2%), and U.S. West Texas Intermediate (WTI) dropped $1.73 (2.29%) to $73.83.
China, the world’s largest oil importer, saw its demand outlook lowered due to factors such as the rise in electric vehicle adoption and economic challenges post-COVID. OPEC cut its forecast for China’s 2024 oil demand growth from 650,000 barrels per day (bpd) to 580,000 bpd.
A stronger U.S. dollar also weighed on oil demand by making dollar-denominated oil more expensive for foreign buyers. U.S. crude inventories were expected to rise last week, while distillate and gasoline stocks likely declined.