Concerns over an economic slowdown in major economies are weighing heavily on oil markets, with Brent futures prices crashing from $81.43/B on 26 August to just $69.19/B on 10 September, their lowest level since December 2021, before rising back above $70/B. Weak economic data from the US and Europe is contributing to the malaise, but the market is increasingly focused on stalling demand growth in China, which has for years been the primary driver of global demand.
“Global oil demand growth continues to decelerate, with reported 1H24 gains of 800,000 b/d y-o-y the lowest since 2020,” says the IEA in its September Oil Market Report (OMR), adding that “The chief driver of this downturn is a rapidly slowing China, where [oil] consumption contracted y-o-y for a fourth straight month in July, by 280,000 b/d.” Even Opec, which remains considerably more bullish in its monthly reports than others, is beginning to revise down its demand growth figures due to the Chinese slowdown, although it continues to forecast global oil demand growth of more than 2mn b/d this year (see table). (CONTINUED - 936 WORDS)
