Oil Prices Slightly Lower Amid Demand Concerns

Oil prices settled just lower on Monday as investors assessed the outlook for oil demand amid global concerns.

At 14:30 ET (18:30 GMT), Brent oil futures fell 0.2% to $82.44 a barrel, while West Texas Intermediate crude futures dropped 0.3% to $78.41 a barrel.

Demand Worries Persist as China Cuts Interest Rates to Boost Economy

Worries about slowing global growth impacting oil demand remained prominent after China, the world’s largest oil importer, unexpectedly lowered its benchmark loan prime rates on Monday to stimulate economic growth.

This decision follows data showing that the Chinese economy grew less than anticipated in the second quarter, raising fears over a potential decline in the country’s crude appetite.

Beijing has committed to implementing additional stimulus measures to reinforce economic growth; however, China’s LPR is already at record lows due to extensive monetary policy easing over the past two years.

These demand jitters occur as some Wall Street analysts caution against a possible supply surplus in the coming year.

Oil Market in Surplus Next Year – Morgan Stanley

Morgan Stanley predicts that while the crude oil market is currently tight, it is expected to experience a surplus next year, with Brent prices potentially falling into the mid-to-high $70s range.

The bank indicated that market tightness will continue for most of the third quarter but that equilibrium would return by the fourth quarter as seasonal demand eases and both OPEC and non-OPEC supply ramp up.

Morgan Stanley anticipates growth in OPEC and non-OPEC supply by approximately 2.5 million barrels per day in 2025, which surpasses expected demand growth.

Refinery runs are projected to peak in August this year and are unlikely to reach that level again until July 2025.

*(Peter Nurse, Ambar Warrick contributed to this article.)