Crude oil plunged anew on Thursday, as signs of slowing demand in key consumer regions weighed on the black commodity. The Organization of the Petroleum Exporting Countries (OPEC) is expected to publish new production quotas shortly in an attempt to provide transparency on recently agreed output cuts.
Oil was down across the board in the latter half of the week, as the selloff that engulfed the market back in October shows no signs of abating. Brent crude, the international benchmark, fell by as much as 4.5% to $54.64 a barrel, the lowest level in 15 months. The contract was last down $1.64, or 2.9%, at $55.60 a barrel on London’s ICE futures exchange.
The West Texas Intermediate (WTI) benchmark for U.S. crude futures bottomed at $45.82 a barrel on the New York Mercantile Exchange, its lowest since November 2017. WTI futures are presently down $1.60, or 3.3%, at $46.57 a barrel.
Oil prices have lost a third of their value since early October, marking one of the worst downturns since 2014. Market fundamentals suggest more losses are likely as traders grapple with a worsening demand outlook.
An abundance of crude is being met with declining demand from emerging markets like China and India, a dangerous combination for commodity traders. Analysts at JBC Energy, an Austrian consulting firm, believe oil demand growth will fall to 888,000 barrels per day next year, the slowest since 2011. Strong demand from emerging Asia, which accounts for more than two-thirds of consumption growth, can no longer be taken for granted.
China is also increasing efforts to replace gasoline-fueled automobiles with new electric models, which may lessen its demand for fossil fuels in the future.