Oil Prices Plummet Amid China Slowdown and Eased Middle East Tensions

Global oil markets face a significant surplus as demand forecasts are slashed and geopolitical risks diminish.

Oil prices fell over 4% as fears of a supply disruption from the Israel-Iran conflict eased, following assurances that Israeli strikes would not target Iranian oil facilities.
OPEC and the International Energy Agency have both cut their forecasts for global oil demand growth for 2024 and 2025, citing weaker economic activity in China.
The IEA reports that global oil supply remains abundant, with storage levels at over 1.2 billion barrels and spare production capacity at historic highs.
China's economic slowdown has led to a significant drop in oil demand, with consumption decreasing by 500,000 barrels per day in August compared to last year.
Despite geopolitical tensions, the market is expected to face a sizeable surplus in the new year, as increased production in the Americas offsets potential disruptions.