Global oil prices tumbled 6% on Thursday on track for the third loss in a row, with US crude plumbing two-week lows, while Brent hit three-week lows after OPEC+ production hike announcement.
Prices are also pressured by renewed concerns about global fuel demand following Trump’s tariffs, and following a surprise increase in US crude stocks last week.
Prices
US crude fell 6% today to $66.41 a barrel, the lowest since March 19, with a session-high at $70.69.
Brent fell 5% to $69.82 a barrel, the lowest since March 13, with a session-high at $73.36.
On Wednesday, US crude lost 0.6%, while Brent slipped 1.5% on profit-taking away from six-week highs on risk aversion due to Trump’s aggressive tariffs.
OPEC+
OPEC+ officially announced a production hike by more than expected in May, due to improving market indicators and higher crude demand.
The alliance said it’ll enact a production hike equivalent to three months of scheduled increases, surpassing previous expectations of a cut focused on May alone.
Saudi Arabia, Russia, Iraq, UAE, Kuwait, Kazakhstan, Algeria, and Oman convened virtually to discuss global market conditions, with the group agreeing on raising output by 411 thousand bpd, sharply above estimates of a 140 thousand bpd hike.
US Tariffs
US President Donald Trump announced new historic reciprocal tariffs on many countries, that start with a base 10% and rise by many folds depending on the country.
He described the new tariffs as “a declaration of independence” and today as the “liberation day”.
Traders fear that the tariffs might tank global growth and hurt demand on fuel and other oil products.
US Stocks
The Energy Information Administration reported a buildup of 6.2 million barrels in US crude stocks last week to 439.8 million barrels, while analysts expected a drop of 0.7 million barrels.
Gasoline stocks fell by 1.6 million barrels to 237.6 million barrels, as distillate stocks rose by 0.3 million barrels to 114.6 million barrels.
