Oil prices took a nosedive on Tuesday, with Brent crude falling below $70 per barrel for the first time since December 2021.This sharp decline comes as OPEC revised its demand forecast downward for the second consecutive month.Brent crude futures, the global oil benchmark, plunged 3.24% to $69.51 a barrel.

Meanwhile, U.S.

West Texas Intermediate (WTI) crude dropped 3.64% to $66.21.OPEC’s monthly report cut its 2024 global oil demand growth forecast to 2.03 million barrels per day (bpd), down from last month’s projection of 2.11 million bpd.The organization also reduced its 2025 demand growth estimate to 1.74 million BPD from 1.78 million BPD.

These downward revisions reflect growing concerns about global economic growth, particularly in China.Oil Market Tensions: Anticipation Builds Ahead of OPEC+ Summit.

(Photo Internet reproduction)However, OPEC’s report suggests stronger growth forecasts for India, Russia, and Brazil may offset further slowdowns in China.The International Energy Agency (IEA) presents a more conservative outlook.

Earlier this year, it lowered its forecast for global oil demand growth to 1.1 million bpd, citing weak industrial activity and mild winter weather in advanced economies.Several factors are contributing to the current oil price slump:1.

robust supplies from non-OPEC producers2.

Weakening demand in major economies like China and the U.S.3.

Speculative selling in the marketDespite production cuts by OPEC+ members, smaller producers are growing frustrated with self-imposed limitations.

This internal pressure could lead to the unwinding of cuts later this year.The price drop poses challenges for oil-dependent economies like Nigeria.

With its 2024 budget based on a $77 per barrel benchmark, the current prices threaten government revenues.While lower oil prices may ease pressure at the pump for consumers, they create economic headaches for producing nations.As the market grapples with oversupply fears and demand uncertainty, all eyes remain on OPEC+ for potential policy responses.