US Oil Prices Erase 2024 Gains on OPEC Output, Economic Growth Fears

U.S. crude oil prices erased their 2024 gains and slumped below $70 per barrel on growing supply concerns and waning demand fears.
October West Texas Intermediate (WTI) crude futures have tumbled by as much as 7 percent over two sessions on the New York Mercantile Exchange, sliding to their lowest levels since December 2023. Year to date, the U.S. benchmark is down by about 2.4 percent after rallying by as much as 21 percent this past spring.
The cartel was set to advance with a production increase of around 180,000 barrels per day.
OPEC added that it could further pause or reverse the production hikes when necessary.
Oil markets have endured volatility over the last week, which might have prompted the entity to reconsider its decision.
“Clearly, lingering demand worries outweigh any potential delay in this supply increase. If these reports turn out to be correct, the next key question is how long the group will delay their supply increases,” commodities strategists at ING said.
They said that the worldwide oil balance is likely to turn into a surplus next year, “so continuing cuts into 2025 might make sense.”
Global energy markets will now focus on the OPEC panel’s Joint Ministerial Monitoring Committee meeting on Oct. 2.
Fawad Razaqzada, a market analyst at Forex.com, said that OPEC’s rosy demand outlook “failed to materialize” as China has struggled to achieve solid economic growth and the U.S. economy “has slowed down markedly.” These trends, he noted, have exacerbated investors’ concerns that injecting fresh supply into global energy markets would weigh on prices amid softening demand.
Beijing’s manufacturing sector has been stuck in contraction territory since May, while the services industry has slowed. Overall, the second-quarter GDP growth rate slowed to 4.7 percent year over year, easing from the 5.3 percent expansion in the first quarter and missing the consensus estimate of 5.1 percent.
Wall Street was jittery to start the holiday-shortened trading week, with the leading benchmark indexes plunging. This was in reaction to the weaker-than-expected August manufacturing data.
However, energy markets could be tighter than some observers suggest, even with slowing U.S. and Chinese manufacturing trends, says Phil Flynn, an energy strategist at The PRICE Futures Group.
He demanded that the Western faction in Tripoli remove Sadiq al-Kabi, the central bank governor, over a squabble regarding how oil revenues are divided.
About 700,000 barrels per day, or roughly half of the country’s oil production, had been offline. This led to a more than 3 percent rally in crude prices during the Aug. 26 trading session.
Traders quickly shrugged off the situation in North Africa, as Libya’s two legislative bodies agreed on Sept. 3 to jointly select a new central bank chief.
“Libya’s oil production could be getting back to normal,” Flynn noted.
WTI and Brent, the international benchmark for oil prices, extended their weakness during the Sept. 5 trading session.