Investing.com — Oil prices edged higher Tuesday, recovering from steep losses even as a group of top producers again cut demand growth forecasts.
At 08:20 ET (13:20 GMT), the price rose 0.6% to $72.28 per barrel, while it rose 0.7% to $68.52 per barrel.
Both contracts lost more than 2% on Monday after falling more than 5% during the previous two trading sessions.
OPEC cuts forecasts for global demand growth
The Organization of the Petroleum Exporting Countries cut its estimate of global oil demand growth for both this year and next year for the fourth month in a row, citing downward revisions in China and other Asian markets.
OPEC published its monthly market report earlier Tuesday and now expects global oil demand to grow by 1.82 million barrels per day this year, down 107,000 barrels per day from last month’s estimate.
Total (EPA:) Global oil demand is expected to reach 104.0 million barrels per day in 2024, supported by strong demand for transportation fuels and continued healthy economic growth, especially in some non-OECD countries, OPEC said .
“Our oil balance through 2025 is in surplus, assuming OPEC+ reverses cuts as currently planned and we do not see dramatic changes in Iranian export volumes,” sad analysts at ING wrote in a note.
China’s stimulus measures are disappointing, more measures are expected
China on Friday announced a debt swap package worth about 10 trillion yuan ($1.6 trillion) to help support local governments in the coming years.
But the measure is expected to provide little direct support to the economy. Beijing also hesitated to announce direct fiscal measures to support the real estate market and private consumption.
The lack of immediate action has dented sentiment towards the world’s largest oil importer, raising concerns that demand in the country will deteriorate further.
Chinese oil imports have fallen steadily in recent months, while fuel demand in the country has also declined.
American supply fear due to Rafael’s convenience
Easing concerns about supply disruptions in the US also weighed on oil prices as Tropical Storm Rafael dissipated over the Gulf of Mexico.
Some energy companies in the region also resumed operations, although Reuters reported that about a quarter of the region’s oil production was still offline.
Rafael weakened to a tropical storm as a hurricane after passing through Cuba, and is expected to weaken further as the hurricane drifts southwest.
(Ambar Warrick contributed to this article.)
