Investing.com — Oil prices fell in Asia on Tuesday, reversing last week’s rebound as caution mounted over a string of economic data this week and OPEC’s cut to its 2024 demand growth forecast.
Prices have rebounded sharply from more than seven-month lows as traders charged a higher risk premium to crude on fears of an escalating conflict between Iran and Israel, with media reports saying an Iranian attack on Israel was likely this week.
But lingering concerns about demand are capping the overall gains, with weak economic data from China, the largest importer, and traders worried about a U.S. recession.
Crude oil for October maturities fell 0.4% to $81.94 a barrel and was down 0.4% to $77.98 a barrel as of 21:35 ET (1:35 a.m. GMT).
OPEC cuts oil demand forecast
The Organization of the Petroleum Exporting Countries (OPEC) said it now expects oil demand to grow by 2.11 million barrels per day in 2024, down from a previous forecast of a 2.25 million barrels per day increase.
In its monthly report released on Monday, the cartel said doubts about China are growing as the country continues to struggle with a post-COVID-19 economic recovery.
The lower demand forecast has raised questions about how much room OPEC has in its plans to gradually ease production cuts.
The production cuts have raised concerns about a slowdown in global oil demand this year amid growing worries about weaker demand from China, the world’s biggest oil importer.
Monday’s cut in demand forecasts came just months before the cartel is due to meet to decide the direction of production for the coming months.
Economic data awaits for further clues
Oil markets were also awaiting a series of major economic data this week for further clues on growth and interest rates.
Inflation data is due to be released on Wednesday and is widely expected to influence the outlook for U.S. interest rates, with traders betting the Federal Reserve will cut rates by 25 or 50 basis points in September.
Inflation data, as well as US data, are due to be released later this week.
Data from China is also due to be released later this week, which will provide further clues about the world’s largest crude importer.
