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(Bloomberg) -- Oil steadied near its lowest level this month, with the outlook for demand in focus after OPEC cut projections on China’s slowdown.

Brent crude traded near $72 a barrel after ending little changed on Tuesday, with West Texas Intermediate above $68. OPEC shaved demand-growth forecasts for a fourth consecutive month, yet the cartel remains more bullish than other market watchers, with many analysts warning of a glut next year.

Crude has traded in a tight range since the middle of last month, with traders tracking trends in Chinese consumption, Middle East tensions, and the implications of Donald Trump’s re-election to the Oval Office. After the monthly report from OPEC, the US will issue its short-term outlook later Wednesday, followed by the International Energy Agency’s view on Thursday.

“The absence of a more direct fiscal stimulus out of China has been casting a shadow on the oil demand outlook, coupled with the prospect of higher US oil production with a Trump presidency,” said Yeap Jun Rong, a market strategist with IG Asia Pte. In addition, there are plans by OPEC+ to raise output, he said.

Reflecting the bearish outlook, timespreads have been weakening. While they remain in a bullish backwardated structure — with nearby contracts at a premium to longer-dated ones — the gap has narrowed. Among the most notable is WTI’s prompt spread, which hit the lowest since February earlier this week.

“The oil market appears to be heading for a sizeable surplus in 2025, driven by a combination of decelerating oil demand growth, still-robust non-OPEC supply growth, and OPEC’s ambition to start growing supply as well,” Morgan Stanley analysts including Martijn Rats said in a report. The bank cut Brent forecasts, with the first-quarter 2025 outlook reduced by $5.50 to $72 a barrel.

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