U.S. crude oil prices drop to lowest since June 2023

U.S. crude oil prices have recently fallen to their lowest levels since June 2023, marking a significant decline in the market. The benchmark price for U.S. crude reached a low of $67.17, resulting in an 8% drop for the week, the worst performance since October of the previous year. The Brent global benchmark also experienced a notable decline, falling 9.8% during the same period. This downturn is attributed to OPEC+'s inability to stabilize market confidence regarding global supply and demand dynamics. OPEC+ has postponed its plans to increase production by 180,000 barrels per day until December, which has contributed to the steep sell-off in oil prices. The anticipated output hike is expected to add approximately 2.2 million barrels per day back into the market by the end of next year. However, this increase comes at a time when oil demand is decreasing, particularly in China, as the country transitions towards electric vehicles, further complicating the supply-demand balance. Year-to-date, U.S. crude has seen a decline of 5.6%, while the Brent benchmark has dropped by 7.8%. Gasoline prices have also retreated, with the RBOB Gasoline October contract down nearly 3 cents. Natural gas prices have shown a slight increase, but overall, the energy market is facing significant challenges. Analysts are adjusting their forecasts in light of these developments. Bank of America has revised its oil price predictions for 2025 downward, while Citi anticipates that Brent prices will average in the $60 range next year, indicating a potential surplus in the market.