OPEC has revised down its global oil demand forecasts for this year and next for the second consecutive month, highlighting the challenges it faces in balancing the market.

The organization's monthly report on Tuesday showed that OPEC has lowered its forecasts for global oil demand growth in 2024 and 2025, marking the second consecutive month of reductions.

The weak outlook further underscores the challenges faced by OPEC+ in balancing the market.

Last week, OPEC+ postponed its plan to gradually increase production in October after oil prices hit a 2024 low.

On Tuesday, OPEC said in a monthly report that global oil demand will increase by 2.03 million barrels per day in 2024, lower than the previous month's expectation of 2.11 million barrels per day.

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OPEC noted that despite the revision, the demand growth forecast is still higher than the historical average of 1.4 million barrels per day before the pandemic and remains in line with the upper limit of industry estimates.

The organization's forecast for global oil demand growth in 2025 was also revised down from 1.78 million barrels per day expected last month to 1.74 million barrels per day.

Driven by demand from China, the Middle East, Asia, and India, non-OECD countries will drive growth next year, adding about 1.6 million barrels per day.

After the report's release, oil prices deepened their earlier decline, with both U.S. and Brent crude continuing to fall sharply, with both falling more than 3%.

WTI crude fell back below $66 a barrel, the first time since May 2023; Brent crude broke below $70 a barrel, the first time since December 2021.

In terms of economic growth, OPEC has raised its global economic growth forecast for 2024 to 3%, while maintaining its forecast for 2025 at 2.9%, consistent with last month's assessment.

The forecast for U.S. economic growth in 2024 and 2025 remains at 2.4% and 1.9%, respectively, while the forecast for Eurozone economic growth in 2024 has been raised to 0.8%, with the 2025 forecast remaining at 1.2%.

There is more disagreement among forecasters about the strength of global oil demand growth in 2024 than usual, partly due to different views on China's demand outlook and, more broadly, due to disagreements on the pace of the world's transition to cleaner fuels.

OPEC remains at the high end of industry estimates after revising down its forecasts.

For months, concerns about weak demand in China have been hanging over the oil market as sales of electric vehicles surge.

Pessimistic economic data has also raised concerns about global oil demand.

In addition, OPEC+ is expected to increase production in December, leading Morgan Stanley and other market analysts to predict a supply glut in 2025.

Meanwhile, rampant speculative selling has also exacerbated the decline in oil prices.

Speculators currently hold the lowest net long positions in crude oil on record, indicating that the decline in oil prices is partly driven by significant changes in financial positions.

As bearish sentiment took hold, oil prices were sold off last week, with U.S. crude and global benchmark Brent crude suffering their worst weeks since October 2023.

At the beginning of this week, oil prices briefly recouped some ground as Tropical Storm Frances threatened oil and gas production and refining operations along the Gulf Coast.

The U.S. Coast Guard ordered all operations at Brownsville and other small Texas ports to be closed on Monday evening.

The Port of Corpus Christi remains open but with restrictions.

According to the National Hurricane Center (NHC), the tropical storm is expected to strengthen significantly and become a hurricane on Tuesday.

ExxonMobil closed its Hoover oil platform in the Gulf of Mexico due to the storm, while Shell suspended drilling operations on two platforms.

Chevron also began shutting down oil and gas production on two of its offshore platforms.