Oil prices pinned at 2-week low after OPEC cuts demand outlook

Investing.com– Oil prices moved little in Asian trade on Wednesday, hovering around two-week lows after the OPEC cut its demand outlook again, while focus remained on more stimulus measures in China.

Markets also turned skittish over the U.S. economy, ahead of key consumer inflation data due later in the day, while speculation over a second Donald Trump presidency persisted. 

Oil prices were nursing steep losses in the past three sessions after fresh fiscal measures from China largely underwhelmed, while fears of supply disruptions in the Gulf of Mexico eased as tropical storm Rafael appeared to be dissipating. 

A stronger dollar also pressured crude prices, as speculation over Trump’s planned policies pushed the greenback to a four-month high. 

Brent oil futures expiring in January fell slightly to $71.86 a barrel, while West Texas Intermediate crude futures fell 0.1% to $67.92 a barrel by 20:17 ET (01:17 GMT).

OPEC cuts 2024, 2025 demand outlook again 

The Organization of Petroleum Exporting Countries cut its outlook for global oil demand growth for a fourth consecutive month on Tuesday, citing persistent concerns over slowing demand in China and other major oil importers. 

The OPEC said in a monthly report that it expects global oil demand to grow by 1.82 million barrels per day in 2024, down by 107,000 bpd from the prior month’s forecast.

The cartel has steadily cut its outlook for demand amid persistent economic weakness in China, as well as concerns over a switch to cleaner fuels in other parts of the world.

But the cartel still holds a relatively optimistic view on demand growth when compared to other energy watchdogs, especially the International Energy Agency. 

The IEA is set to release a monthly report on Thursday, after also steadily cutting its demand outlook this year.

Still, the OPEC had offered some strength to oil prices earlier in November after announcing a delay in plans to increase production this year. 

China stimulus, US CPI in focus 

Oil markets were now holding out for more cues on China’s plans for fiscal stimulus, after a recent 10 trillion yuan ($1.4 trillion) debt package largely underwhelmed. Analysts said the country was seeking more clarity on how the Trump administration will treat Beijing before mobilizing more stimulus. 

Beijing is likely to unveil more stimulus during a series of top government meetings in December.

In the U.S., focus was on a consumer inflation reading due later on Wednesday. The reading is widely expected to factor into the Federal Reserve’s outlook on interest rates.