Oil prices continue to drop sharply on Thursday and have fallen to their lowest level since September 4. In the North American session on Thursday, West Texas Intermediate oil for October delivery is trading at $54.12, down 3.27% on the day. This follows a decline on Wednesday of 3.36%.
OPEC Lowers Estimate for Oil Demand
OPEC has lowered its forecast for global oil demand for the rest of 2019. The September report estimated worldwide consumption at 1.02 million barrels per day, compared to 1.82 million in the August report. This was a result of weak global growth in the first half and the expectation that economic conditions would remain weak for the remainder of 2019. This has provided downward pressure on oil prices.
Trump Toys With Sanction Relief
U.S. President Trump is looking to engage Iran in negotiations and has fired Robert Bolton, his National Security Advisor. Bolton has been a proponent of choking U.S. sanctions against Iran, but Trump may be looking to change direction and use a carrot rather than the stick approach with Tehran. Iran’s oil exports are down significantly, and an easing in sanctions would likely see a boost in Iranian oil shipments, resulting in a boost in worldwide oil supplies.