Good news about oil price
The prices of gross oil have reached the lowest level in the last three years, after the OPEC+ Alliance confirmed the acceleration of production increases in June, despite a global context marked by weak demand and accentuated commercial tensions between the US and China.
On Monday, in the Asian session, the futures quotations of Brent oil decreased by up to 4.6%, reaching $ 58.50 per barrel, and those for West Texas intermediate (WTI) went down by almost 5%, reaching $ 55.53 – the lowest levels of February 2021. 957,000 barrels per day (BPD) in June.
OPEC+ maintains its increased offer course
Eight member states of the OPEC+ Alliance, which together provide about 40% of global oil production, agreed an increase in production by 411,000 BPD in June, thus continuing the gradual reduction plan of production instituted in 2023. In that year, OPEC+ reduced the production by approximately 2.2 million BPD, in the effort.
Accelerated production of production – from 135,000 BPD in April, to 411,000 BPD in May and June – is seen by analysts as a reaction to non -compliance with certain Member States, especially Kazakhstan and Iraq. According to an official statement, OPEC+ mentions that « these gradual increases can be suspended or reversed according to the market conditions », emphasizing the flexible character in order to support the market stability.
Poor demand pulls down prices
Despite the efforts to adjust the offer, the oil market seems to be dominated by a declining demand. Since mid -January, quotations have lost over 20%, against the background of commercial tensions between the US and China, as well as some internal energy policies in the US favorable to the expansion of production.
Analysts warn that prospects remain uncertain, being mainly influenced by the dynamics of global demand. « The oil market is currently guided in particular by demand. Price increase will depend on economic relaunch, which in turn is related to the evolutions of US trade policy, » said Kyle Rodda, chief analyst at Capital.com Australia.
Last week, Oil registered a decrease of over 7% – the largest weekly decline of the last month. In the US, the economy has contracted in the first quarter, and the labor market data indicates a slowdown. In China, the main oil importer worldwide, manufacturing activity has reached the lowest level of the last 16 months.
Modest hopes on resuming US-China dialog
The decline of the demand is also fueled by the uncertainties related to the commercial relations between Washington and Beijing. US President Donald Trump suggested on Sunday, in an NBC interview, that could reduce the rates imposed on China « at one point », admitting that « otherwise you could not do business with them, and they want to do business. »
For his part, the China Ministry of Commerce said on Friday that it is evaluating the possibility of resuming negotiations with the US, noting that Washington has sent signals through diplomatic channels.
The next OPEC+meeting, scheduled for June 1, will be carefully followed by markets, in the context of increased volatility and persistent pressures on the price of oil, at a time when geopolitical and macroeconomic factors play an increasing role in outlining global energy perspectives.
