May 02, 2025 (MarketLine via COMTEX) --
There was an overall decrease in crude oil prices during the week amid concerns about a potential oversupply in the global markets. These concerns stemmed from the anticipation that OPEC+ might announce a significant hike in its collective production target for June 2025, at a time when the global economic growth forecast remains clouded by uncertainty due to the tariff policies of the US. Additionally, the discussions over ongoing tariff disputes between the US and its trade partners, particularly China, have seen minimal progress, exacerbating fears of a worldwide economic slowdown that could impact global energy demand, and thus oil prices. Additionally, a fall in the US gross domestic product (GDP) during the January-March 2025 quarter exerted further downward pressure on oil 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 and Tuesday, weighed down by rumors about a potential disagreement among certain OPEC+ members over their production policy that might prompt the group to announce a bigger output hike for June 2025. These rumors largely stemmed from the fact that one of its members, Kazakhstan, produced beyond its assigned quota and thereby managed to achieve around 7% year-on-year gain in its crude oil exports during Q1 2025. Prices were also down due to concerns over the prevailing US-China tariff dispute that could impact economic growth of these two large economies. Apparently, the two countries were currently not engaged in any discussions over resolving this dispute, which raised fears over a trade slowdown.Oil prices slid further on Wednesday, weighed down by growing likelihood of the OPEC+ announcing a large increase to its collective output for June 2025 during its forthcoming policy meet on May 5, 2025. Some media reports indicated that Saudi Arabia and a few other OPEC+ producers were keen on building market share with higher crude oil exports, even if the demand outlook remained subdued. However, the decrease in prices was somewhat limited by a weekly fall in the US crude oil inventory. According to the US Energy Information Administration (EIA), crude stockpiles in the country were down by 2.7 million barrels for the week ending on April 25, 2025, due to strong exports as well as a rise in demand from domestic refiners. Oil prices extended their fall on Thursday and Friday, weighed down by worries over slowing economic growth in the US and its cascading effect on crude oil demand. The US GDP dipped year-on-year by 0.3% during Q1 2025, as revealed by the official data. The country trade deficit also grew during this quarter as companies imported more goods into the country before the onset of the high tariff regime. Prices were also weighed down by expectations that the OPEC+ group would agree over an output increase during its policy review meet on May 3, 2025. However, the fall in prices was somewhat limited by differences between the US and Iran over a nuclear deal in their ongoing discussions. Their next round of talks that were earlier scheduled for May 3, 2025, in Rome, was postponed indefinitely due to these differences. Subsequently, the US President Trump issued a warning to sanction any country that purchases Iranian hydrocarbons.
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COMTEX_465337954/2227/2025-05-09T04:12:34
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