Recently, oil prices barely moved, but for the 2024 third quarter, they lost 17% as worries about diminishing global demand overshadowed concerns that escalating hostilities in the Middle East may restrict the supply of crude.
The November delivery of Brent crude futures expired recently, and the contract settled at USD 71.77 a barrel, down 21 cents.
Meanwhile, the more actively traded Brent contract for December delivery gained 27 cents to USD 71.81.
The global benchmark experienced its largest monthly loss since November 2022 when it fell by 9% in September 2024. The global benchmark fell by 17% in the third quarter, marking its largest quarterly loss in a year following a third consecutive month of declines.
WTI futures decreased by one cent, ultimately settling at USD 68.17. The US benchmark experienced its largest monthly decline since October 2023 of 7%, and its largest quarterly decline since the third quarter of 2023 of 16%.
The prospect that Iran, a major producer and member of the Organisation of the Petroleum Exporting Countries (OPEC), may be directly involved in an intensifying Middle East conflict supported prices.
Israel has intensified its attacks over the last two weeks, executing strikes that have struck Houthi targets in Yemen and killed leaders of Hamas and Hezbollah in Lebanon.
According to Matador Economics economist Tim Snyder, the market is considering whether the conflict in the Middle East will spread to other parts of the region.
The world’s second-biggest economy and top oil importer, China, announced fiscal stimulus measures recently, but the impact on oil prices was muted. Traders wonder if these steps will be sufficient to improve China’s demand, which has started the year off weaker than anticipated.
In addition, worries about growing global crude supplies are impacting the month’s prices.
The de facto leader of OPEC, Saudi Arabia, was reported to be getting ready to abandon its unofficial price target of USD 100 per barrel for crude as it prepared to increase output, which caused oil prices to plummet.