Apr 25, 2025 (MarketLine via COMTEX) --
Crude oil prices experienced a decline during the week amid concerns about a potential oversupply in the global markets. This was primarily due to prospects of the OPEC+ announcing further increase in its aggregate output for June 2025. Besides, negotiations in the Russia-Ukraine conflict appeared to be nearing a resolution, thereby raising prospects ofRussian crude exports becoming sanction-free in the coming weeks. Elsewhere, the US and Iran held positive talks over the possible framework of a nuclear deal, which led to speculation that the former might rollback its sanctions on Iranian crude oil exports. Nevertheless, the US announced a fresh set of sanctions on companies involved in Iranian energy exports, thus containing the fall in prices. Moreover, the downside to prices was also limited by signs of the US and China undertaking efforts to lower the import tariffs on their respective goods. A weekly fall in the US gasoline and distillate fuel stockpiles also helped restrict the downside to prices during the week.
Some key factors that led to changes in crude oil prices this week are as follows:
- Oil prices fell on Monday, weighed down by reports of constructive discussions between the US and Iran over a nuclear
deal. It led to speculation that the US might not impose further sanctions on Iran, thereby allowing the country to export
at least some volumes of its crude oil to global markets. Prices also came under pressure from concerns over the growth
outlook in the US after President Trump commented on the lack of fiscal support from the country’s central bank.
- Oil prices rose on Tuesday, after the US sanctioned Iranian entities dealing in shipping of liquefied petroleum gas and
crude oil to overseas markets. It sent out a message that the US would ensure Iran’s crude oil exports come to a complete
halt unless a nuclear deal was signed between the two countries. However, the upside to prices were somewhat
contained by prevailing global trade uncertainties due to the US tariff policies. In its quarterly economic update, the
International Monetary Fund (IMF) lowered its growth outlook for 2025 and 2026 each by 0.4% from its previous
estimate, citing the recent hike in US tariffs on its trading partners.
- Oil prices declined on Wednesday, weighed down by worries that the OPEC+ would announce further increase to its
collective crude output next month. This might lead to surplus crude supplies in global markets amid signs of slowing
economic growth. The group is scheduled to decide on its production policy for June 2025 in early May and is inclined
towards preserving market share by raising its production target. However, the slide in oil prices was somewhat
contained by sizable decrease in the US gasoline and distillate fuel inventory. It implied that the fuel consumption in the
country remained robust so far despite the possible slowdown in economic activity from the tariff hikes. According to
the US Energy Information Administration (EIA), gasoline stockpiles fell by 4.5 million barrels for the week ending on
April 18, 2025, while distillate fuel stocks were down by 2.4 million barrels. The country’s crude oil inventory rose during
the same week, albeit by a relatively small volume of 200,000 barrels.
- Oil prices rose slightly on Thursday and Friday, supported by signs of easing trade tensions between the US and China.
The US Treasury Secretary, Scott Bessent, hinted at possible cuts in tariffs on China after commenting that the current
rates were not viable. While in China, the government was preparing a list of US goods that could be excluded from its
125% import tariffs. Prices also received support from speculation that the US Federal Reserve might consider lowering
the country’s benchmark interest rates in June 2025 depending on inflation levels at that time. This speculation arose
from statements of President of the Federal Reserve Bank of Cleveland, Beth Hammack, who left the door open for all
possibilities during the next fiscal review. However, the upside to prices was somewhat restrained by prospects of a
likely rollback of Western sanctions on Russia’s energy exports. This was after Russia’s Foreign Minister, Sergey Lavrov,
stated that his country was edging closer to a Ukraine ceasefire deal with the US.
http://www.datamonitor.com
Republication or redistribution, including by framing or similar means,
is expressly prohibited without prior written consent. Datamonitor shall
not be liable for errors or delays in the content, or for any actions
taken in reliance thereon
COMTEX_465143014/2227/2025-05-02T09:37:00
Copyright (C) 2025 Datamonitor. All rights reserved
