Crude prices rangebound in Asia trade after OPEC lowers demand forecast

Singapore — 0300 GMT: Crude oil futures were rangebound during mid-morning trade in Asia Sept. 15 after OPEC lowered its oil demand forecast in a monthly report.

At 11 am Singapore time (0300 GMT), ICE Brent November crude futures were down 6 cents/b (0.15%) from the Sept. 14 settle at $39.55/b, while the NYMEX October light sweet crude contract was 4 cents/b (0.11%) lower at $37.22/b.

"Oil prices bounced off overnight lows and are finding tentative support from broader markets and appear to be in some semblance of consolidation mode after traders were served up another dish of angst when OPEC revised their demand outlook downwards," Stephen Innes, chief global markets strategist at AxiCorp, said in a Sept. 15 note.

OPEC in its latest oil market forecast Sept. 14 revised down its projection for global demand by 400,000 b/d for 2020 and by 770,000 b/d for 2021. Oil demand is now forecast to average 90.23 million b/d in 2020 and 96.86 million b/d in 2021, well below the 2019 level.

At the same time, it expects non-OPEC supply to increase more than the organization had previously forecast, largely due upticks in the US, Canada and Brazil.

OPEC also lowered its global economic growth estimate to minus 4.1% for 2020 from minus 4%.

The OPEC+ monitoring committee is set to meet Sept. 17, although analysts expect the meeting to yield little change.

"The OPEC+ monitoring committee meets on Thursday and although nervousness over Brent prices must have increased, we do not expect any change to the production cut schedule. OEPC+ will take a wait and hope approach for this month at least," said Jeffrey Halley, senior market analyst for Asia Pacific at Oanda, in a note Sept. 15.

The downward revisions by OPEC put into focus the uncertain demand recovery for the remainder of the year amid a resurgence of COVID-19 cases in several parts of the world.

"Oil markets are now facing the reality of falling demand and abundant supplies once again. Oil is unable to sustain any meaningful rallies in this environment, and overall, all the signs are suggesting that further price falls lie ahead in the next week," Halley added.

The International Energy Agency is due to release its monthly report on Sept. 15.