Oil prices saw a sharp decline of over $2 during early Asian trading on Tuesday, triggered by a lowered global demand forecast from OPEC and heightened concerns over potential military actions involving Israel and Iran.
Market Overview
Brent Crude Futures: Fell by $2.11, or 2.7%, to settle at $75.35 per barrel.
U.S. West Texas Intermediate (WTI) Futures: Dropped $2.07, or 2.83%, to $73.76 per barrel.
This followed a roughly 2% decline in both benchmarks during Monday’s trading session.
Key Factors Behind the Decline
OPEC’s Demand Outlook Revision:
The Organization of the Petroleum Exporting Countries (OPEC) revised its global oil demand growth projections for 2024 and 2025 downward, fueling bearish sentiment in the market.
Geopolitical Tensions:
Israeli Prime Minister Benjamin Netanyahu reportedly informed U.S. officials that Israel is prepared to target Iranian military sites in potential military actions, rather than focusing on nuclear or oil facilities. This development has added to market uncertainty, with concerns over possible disruptions to oil supply due to rising tensions in the region.
The combination of OPEC’s revised outlook and escalating geopolitical concerns contributed to the significant dip in oil prices, reflecting the market’s sensitivity to both supply forecasts and international political dynamics.
