A drop of 3.5% was noted in the international prices of Brent oil below 75 dollars.

It was preceded by new OPEC estimates for weak demand in both 2024 and 2025, but also by a Washington Post report according to which Israel has pledged not to hit Iran’s oil or nuclear facilities.

In more detail, OPEC on Monday reduced its estimates for the increase in global oil demand in 2024, taking into account the financial data available to him so far. It also cut its forecast for 2025, marking the third consecutive downward revision.

This weaker perspective reflects the dilemma faced by OPEC+which consists of Organization of Petroleum Exporting Countries and allies like Russia, which plans to start to increase production in Decembersomething he had put on ice, because of her falling prices of black gold.

On Monday, OPEC at his monthly report indicated that global oil demand will increase by 1.93 million barrels per day (bpd) in 2024, down from the 2.03 million bpd increase expected last month. Until August, OPEC had kept the forecast unchanged from July 2023.

OR China reflects most of the decrease in Agency estimates for 2024. O OPEC lowered its forecast for China’s growth to 580,000 bpd from 650,000 bpd it previously forecast. While government stimulus measures announced by Beijing will support demand in the fourth quarter, oil use is struggling due to economic challenges and moves to cleaner fuels, OPEC said.

“Diesel consumption continued to decline due to a slowdown in economic activity, mainly a slowdown in building and residential construction and the replacement of diesel by liquefied natural gas (LNG) in heavy trucksOPEC said, referring to August.

LCOc1 oil recorded down about 2% after the publication of the report, with the crude Brent to trade below $78 a barrel.

There is a large divergence in forecasts for the dynamics of demand growth in 2024, which is a result of different estimates around China on the one hand and on the pace of the global shift to cleaner fuels on the other. OPEC is still at the top of industry estimates and has a long way to go to align with the International Energy Agency’s (IEA) much lower estimate.

OPEC stated that this year’s increase in demand is still above the historical average of 1.4 million bpd seen before the COVID-19 pandemic, which caused a plunge in oil use.

For next year, OPEC cut its estimate for global demand growth to 1.64 million bpd from 1.74 million bpd.

Libya, Iraq and Russia are making cuts

OPEC+ has implemented a series of cuts of production from late 2022 to support the market, most of which will be in place until the end of 2025.

The agency had been set to begin “relaxing” the most recent cut limit of 2.2 million bpd from October, but decided to delay the plan for two months after the drop in oil prices.

From the OPEC report it appears that production decreased in September due to of the unrest in Libya and the cuts on the part of Iraq. OPEC+ pumped 40.1 million bpd, down 557,000 bpd from August. Iraq pumped 4.11 million bpd, down 155,000 bpd but still above the 4 million bpd mark.

In addition to Iraq, OPEC has named Russia and Kazakhstan among the countries that pumped above quotas.

Russia cut output in September by 28,000 bpd to about 9 million bpd, the report said, citing data from secondary sources such as consulting firms. Kazakhstan, however, increased output by 75,000 bpd to 1.55 million bpd.

The Organization’s report said demand for OPEC+ crude, or crude from OPEC plus allied countries, with which it is cooperating, would reach 43.7 million bpd in the fourth quarter, theoretically allowing it room for higher output .

Other forecasts show a smaller margin. The International Energy Agency (IEA)who represents industrialized countries, sees much lower OPEC demand growth of 900,000 bpd in 2024. The IEA is expected to release its estimates on Tuesday.