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Oil prices plunged on Tuesday to hit their lowest level since December 2021.
Prices for brent crude, the international benchmark, fell 4% on Tuesday to $68.99 a barrel, representing a significant break below the key $70 support level.
Tuesday's decline in Brent oil follows last week's 8% decline in the commodity.
A one-two punch of supply and demand issues has pressured oil's 10% year-to-date price decline, with demand concerns taking center stage in recent weeks.
A growth scare in early August and lingering concerns of a US recession, combined with the continued slowdown in China's economy, have hurt the demand outlook for oil.
In its monthly oil market report, OPEC cut its outlook for oil demand because of the deceleration in China's economy. It now expects daily demand for oil to grow by roughly 2 million barrels per day in 2024, 80,000 barrels per day lower than its prior forecast.
OPEC also cut its 2025 demand outlook for oil by 40,000 barrels per day to 1.7 million barrels.
Because of the lower demand expectations and slumping oil prices, OPEC delayed its plans to boost oil production through at least November, but the move probably won't have as much of an impact on the price of oil as it has in the past.
That's because the US is producing a record amount of oil, and it's showing no signs of slowing down.
America's oil production continues to grow, hitting 13 million barrels per day in August, according to data from YCharts. That's nearly double its oil production levels in 2014.
Senior market analyst David Morrison at Trade Nation said in an email that investors shouldn't expect a rebound in oil prices anytime soon.
"The fundamentals should continue to weigh on prices, as supply remains plentiful while the outlook for demand growth remains weak," Morrison said.
He added: "Recent experience suggests that crude oil can stay oversold for long periods of time, so this shouldn't imply that a bounce is coming."
