Concerns over supply and demand imbalances continue to plague oil prices, which fell again Tuesday after seeing small uptick on Monday. Equities appear shaky as well, perhaps as a result.
U.S. West Texas Intermediate crude fell by 5% to a low of $56.85 on Tuesday, its lowest level in the last 11 months. Brent crude declined by nearly 4% to $66.65, its lowest level over the last 7 months.
OPEC nations and its associate members hinted at a production cut last Sunday, which may have given oil prices a small boost on Monday. But President Trump’s tweet Monday asking OPEC members and Saudi Arabia not to cut supply may have reversed sentiment.
Further uncertainty entered the markets as OPEC revised oil demand for 2019 downward, for the fourth straight month. The cartel downgraded their demand-growth forecast by 70K bbl/day from its projection last month to 1.29M bbl/day in 2019, as they expect production increases from non-OPEC countries to outpace demand growth.