Oil prices resumed their plunge this week, reaching their lowest levels since July and a far cry from the $100 price point analysts had predicted just a few months ago.

Brent crude, the global oil benchmark, fell below $80 a barrel on Nov. 8 for the first time since July 20. It’s down more than 19% from its Sept. 26 peak of $96.55 a barrel.

U.S. West Texas Intermediate futures are trading below $76 a barrel after nosediving 17% over a six-week span.

Less than two months ago, Creditnews reported on the possibility of oil prices returning to $100 for the first time since mid-2022 after OPEC and its allies decided to extend supply cuts through 2024.

The war between Israel and Hamas a few weeks later was supposed to put more upward pressure on oil prices, or so analysts believed.

But that didn’t happen. Instead, the same old forces of supply and demand dictated prices.

More supply, less demand

Despite its commitment to reduce supplies, OPEC’s crude output rose by 180,000 barrels per day in October, according to Reuters data. Much of that increase came from the cartel’s periphery, as Nigeria and Angola boosted production.

It also came to light that U.S. crude output reached a monthly record of 13.05 million barrels per day in August, according to the EIA.

But while more oil keeps flooding the market, demand for it isn't keeping up. Part of the reason is that the largest oil-consuming economies and sectors are in something of a slump.

For example, China is the world's second-largest oil consumer, and its exports declined for a sixth consecutive month in October.

“The data signals the continued decline in the Chinese economic outlook driven by deteriorating demand in the country's largest export destination: the West,” City Index analyst Fiona Cincotta told Reuters.

Meanwhile, heavy oil-consuming sectors such as manufacturing have been in a downturn from China to the eurozone and even the U.S.

Global growth woes persist

It’s not just manufacturing and export-oriented industries that are languishing. Global economic growth is shifting into lower gear because of higher interest rates and elevated inflation.

According to the IMF, global growth is expected to be weaker across the board in 2024, with the U.S. and Eurozone economies forecast to expand just 1.5% and 1.2%, respectively.

Growth in major emerging markets such as China and India will either weaken or stall in 2024, the IMF predicts.

Weaker growth usually means less consumption and reduced demand for oil—a trend that’s already underway in the U.S.

Per EIA data, total petroleum consumption in the U.S. is expected to fall by 300,000 to 20.1 million barrels per day this year. That’s a stark reversal from the EIA’s previous forecast calling for an increase of 100,000 barrels per day.