Oil Slips Back Below $60 as Saudis Signal Increased OPEC+ Supply
Oil fell, after the biggest monthly drop since 2021, on signs the Saudi-led OPEC+ alliance may be entering a prolonged period of higher output.
Brent for July slid below $60 a barrel. Reuters reported that Saudi officials told allies the kingdom can endure a period of depressed prices, reinforcing expectations the top exporter will steer OPEC+ to another supply surge next week.
Crude sank 16% in April after OPEC+ rocked the market with a surprise decision to pump more than expected, just as other producers including Guyana also ramp up output. At the same time, the trade war is starting to drag on economies from the US to China, and there are already tentative signs of an impact on oil consumers.
“We continue to expect downward pressure on oil prices today,” said Arne Lohmann Rasmussen, chief analyst at A/S Global Risk Management. “Market expectations have grown that Saudi Arabia may be shifting strategy: from defending prices to defending market share.
While US Trade Representative Jamieson Greer told Fox News that the US was nearing an announcement of a first tranche of deals, he also said he hadn’t held official talks with his Chinese counterpart. In separate remarks, President Donald Trump said there was a good chance of an agreement with Beijing.
Data on Wednesday showed the US economy shrinking for the first time since 2022, while factory activity in China slipped into the worst contraction since December 2023. That overshadowed more bullish figures showing US crude and gasoline inventories dropped last week.
US moves on sanctions were also in focus. Trump Senate ally Lindsey Graham said he had the commitment of 72 colleagues for a bill that would enact “bone-crushing” sanctions on Russia, as well as on countries taking its oil, if Vladimir Putin didn’t engage in serious talks to end the war in Ukraine.
Brent for July settlement lost 1.82% to 59.95 at 10:24 a.m. in London
West Texas Intermediate for June delivery dropped 2.01% to 57.04 a barrel
Source : Bloomberg
