Crude oil took a dive today on reports that Israel was willing to not target Iranian oil facilities in its retaliatory strike that had oil traders on edge earlier this month.
The original report came out in the Washington Post, which wrote, citing two unnamed officials, that Israel’s Prime Minister Benjamin Netanyahu had told his U.S. allies that the IDF would focus on military targets, and not oil and nuclear power facilities.
That report essentially killed the geopolitical premium supporting oil prices last week, reinforcing a couple of other bearish news updates since the start of the week.
The first of these was Chinese consumer prices, which appeared to have disappointed oil traders by not rising sufficiently in September, and the other was OPEC’s latest monthly report that featured a revised outlook on global oil demand.
The group cut its oil demand growth estimate for a third consecutive month, based on actual consumption data so far this year and expectations of slightly lower demand in some regions.
OPEC now expects global crude oil demand to grow by 1.93 million barrels per day in 2024, down by 106,000 bpd compared to last month’s assessment, the cartel’s Monthly Oil Market Report for October showed on Monday.
Chinese oil demand growth was cut again and accounted for most of the downward revision of global oil demand growth in 2024. OPEC now expects China’s oil demand to grow by 580,000 bpd this year, down from the 650,000 bpd growth expected in the September report.
In further bearish news for oil prices, the latest China energy import data showed that shipments of crude over the first nine months of the year had dipped by 3%, according to Reuters. Imports were also down by over 7% from August as refineries entered planned maintenance amid weak margins.
By Irina Slav for Oilprice.com