Brent crude oil prices have dipped below $70 per barrel for the first time since December 2021, reflecting growing concerns about global oil demand.
On Tuesday, Brent crude, the global oil benchmark, fell by 3.45% to $69.36 per barrel, while West Texas Intermediate (WTI) dropped by 3.86% to $66.06 per barrel.
The decline in oil prices comes in the wake of disappointing economic data from the United States and China.
Recent figures, particularly weak import numbers released on Tuesday, have heightened fears of reduced oil demand from the world’s two largest consumers. This has led to concerns about a potential surplus in the oil market over the coming year.
Bloomberg reports that the situation is exacerbated by increased production from countries outside the Organisation of Petroleum Exporting Countries (OPEC).
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This additional supply, combined with the bleak economic outlook, has contributed to the downward pressure on oil prices.
The price drop follows a recent decision by OPEC and its allies (OPEC+) to delay plans to boost production by 180,000 barrels per day (bpd).
Instead, the oil cartel, which includes major producers such as Saudi Arabia, Russia, Iraq, the United Arab Emirates, Kuwait, Kazakhstan, Algeria, and Oman, has decided to extend existing voluntary production cuts of 2.2 million bpd until November.
OPEC also announced that from December 1, the cuts would be gradually phased out on a monthly basis, with the possibility of pausing or reversing the adjustments if necessary.
The cartel reaffirmed that countries exceeding their production quotas will compensate for the overproduction by September 2025.
The ongoing adjustments by OPEC+ aim to balance the market, but the current economic uncertainties and rising output from non-OPEC producers continue to influence global oil prices.