The price of U.S. crude oil drops below $68 per barrel after OPEC reduces its forecast.

• OPEC revised its demand growth forecast for the second consecutive month.
• Softening demand expectations in China are weighing on the oil market.
• As a storm threatens to disrupt supplies on the Gulf Coast, oil prices increased in the previous session.

On Tuesday, U.S. crude oil futures dropped more than 1%, reversing their gains from the previous session after OPEC cut its demand forecast for the second time in two months.

OPEC now anticipates demand growth of 1.7 million barrels per day in 2024, which is 40,000 bpd lower than its previous forecast. The group of oil producers expects demand growth of 2 million barrels per day in 2024, which is 80,000 bpd slower than its previous forecast.

In August, OPEC revised its demand forecast because of weakening demand in China, the world's largest crude consumer.

Here are Tuesday's energy prices:

• The October contract price for crude oil is $67.88 per barrel, which represents a decrease of 83 cents or 1.2%. To date in the year, the US has experienced a decline in crude oil of 5.3%.
• The November contract price per barrel is $70.98, a decrease of 86 cents or 1.2%, while the global benchmark has pulled back 7.8% year to date.
• Gasoline prices in October remained relatively stable at $1.91 per gallon. Despite this, the year-to-date decline in gasoline prices has been significant, with a 9% drop.
• The October contract price for natural gas is $2.23 per thousand cubic feet, which is a 6-cent increase, or 2.95%. To date, gas prices have decreased by 11% year over year.

The surge in electric vehicle sales in China has caused concerns about a decline in demand for oil, which has been affecting the oil market for several months. Additionally, OPEC+ is predicted to increase production in December, and market analysts, including Morgan Stanley, anticipate a surplus of oil in 2025.

Last week, oil prices plummeted due to bearish sentiment, with both U.S. crude and global benchmark Brent experiencing their worst weeks since October 2023.

Tropical Storm Francine poses a threat to oil and gas production as well as refining operations on the Gulf Coast, causing futures to briefly recover some lost ground on Monday.