Oil prices fell 2% on Monday after China’s stimulatory plans failed to impress traders and oil alliance OPEC lowered its demand forecast.
West Texas Intermediate (CL=F) and Brent (BZ=F) each hovered above $73 per barrel.BZ=F) traded above 73 per barrel.
The declines came after highly anticipated commentary from China’s Finance Minister over the weekend lacked specific details, including the size of the country’s stimulus needed to imply increased crude demand by the world’s largest oil importer.
“They’re not being clear on what they’re going to do,” Dennis Kissler, senior vice president of trading at BOK Financial, told Yahoo Finance.
Putting additional pressure on Monday’s prices was the latest oil demand forecast released by the Organization of the Petroleum Exporting Countries.
OPEC cut its projection for the third consecutive month. The group now sees demand growing by 1.9 million barrels per day this year, down from 2 million in its previous forecast, according to its monthly report.
For 2025, the oil alliance sees demand growing by 1.6 million barrels per day, compared to a prior projection of 1.7 million barrels.
Crude futures have risen roughly 8% this month over speculation that Iran’s petroleum production could be targeted by Israel amid escalating tensions in the Middle East.
The markets have priced in not only the risk of interruptions to Iran’s 3 million barrels of crude per day, but also shipments along the Strait of Hormuz, a crude chokepoint in the region.
Earlier this month Brent rose above $80 per barrel, its highest level since August, in anticipation of an Israeli retaliation against Iran following a missile strike by Tehran.
Futures have since come off that peak as the US indicated its reluctance to a retaliatory attack against Iranian oil fields.
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