Oil resumed its downward trend on Tuesday, tanking more than 3% after oil alliance OPEC lowered its demand growth forecast in 2024 and 2025.

On Tuesday, West Texas Intermediate (CL=F) slid more than 3% to hover near $66 per barrel, while Brent (BZ=F) also fell to trade below $70 per barrel, its lowest level since December 2021.

In its monthly report, OPEC said it expects oil demand growth in 2024 to increase by about 2.0 million barrels per day, 80,000 barrels less than its prior estimate. The oil alliance also slightly lowered its 2025 growth forecast.

China was one of the main drivers for the downward revision. The country has been facing economic headwinds amid a housing crisis. It has also increasingly turned to natural gas, which is less expensive and considered cleaner than oil, as part of its energy transition.

“Diesel demand was subdued by weak manufacturing, construction, and trucking activity, as well as the penetration of LNG [Liquified Natural Gas] trucks, weakening the demand for transportation diesel,” said the report.

OPEC's growth forecast is still higher than other industry estimates. The US Energy Information Administration predicts oil growth of 1.1 million barrels per day this year.

Wall Street analysts have turned gloomier on crude, lowering their price target on the commodity in part due to weak Chinese demand.

Increasing signs of economic cracks in the US and Europe, where the summer driving season has been unwinding, have also weighed on prices.

Oil's downturn has helped precipitate a plummet in gas prices in the US as well with at least one analyst predicting the national average would fall to $3 by the end of the year.

On Monday traders were assessing the possible impact of Tropical Storm Francine's trajectory towards Texas and Louisiana on oil and gas prices.

Andy Lipow of Lipow Oil Associates sees minimal impacts despite increasing winds which are expected to change the storm’s status to hurricane as early as Tuesday.

“Barring a flooding/storm surge event, I don’t foresee this storm affecting either supply or price to any significant degree. The consumer will get their gasoline,” said Lipow in a recent note.

Crude has been hovering near its lowest level of 2024. In recent weeks futures have erased all of their year-to-date gains.

WTI is down roughly 5% year to date and hovering near its lows for the year. Brent crude is down about 8% during the same period.

Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X at @ines_ferre.