Energy stocks lower as oil prices fall near 3-year low
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More news: Energy stocks lowered on the ASX after a softening demand forecast pushed oil prices to their lowest level since December 2021.
Oil and gas majors Woodside Energy (-2.3%), Santos (-1.6%), Beach Energy (-1.4%) and Ampol (-0.3%) were all trading lower by 1:45pm AEST.
Karoon Energy fell 4.1% as it announced the temporary closure of its Who Dat project due to the anticipated arrival of Hurricane Francine in Louisiana this week.
The energy sector, down 1.33%, saw the second largest sector-wide slide while the benchmark ASX 200 fell 0.27%.
Oil slides to near 3-year low on weak demand outlook
The news: Oil prices slumped to their lowest level since December 2021 after the Organization of the Petroleum Exporting Countries (OPEC) plus group revised down its demand forecast for this year and 2025, offsetting supply concerns from tropical storm Francine.
The numbers: Brent crude futures fell 3.69% to USD69.19 ($104) a barrel. US West Texas Intermediate crude futures (WTI)declined 4.3% to USD65.75.
The context: The sharp decline comes after the OPEC in a monthly report said world oil demand would rise by 2.03 million barrels per day (bpd) in 2024, down from last month's forecast for growth of 2.11 million bpd.
Until last month, OPEC had kept the forecast unchanged since it was first made in July 2023. OPEC also cut its 2025 global demand growth estimate to 1.74 million bpd from 1.78 million bpd.
Separately, the US Energy Information Administration (EIA) said global output growth will be smaller than prior forecasts. Prices slid on the weakening global demand prospects and expectations of oil oversupply.
Investors are increasingly pricing in a slowing global economy, with latest data showing China's exports grew in August at their fastest in nearly one and a half years, but imports disappointed with domestic demand depressed.
Meanwhile, tropical storm Francine barrelled across the Gulf of Mexico driving operators to shut in around a quarter of offshore crude production.
The source: Reuters
