On Tuesday, oil prices are declining due to pressure from concerns over escalating trade tensions. Market participants are worried about the impact of increasing friction between the US and EU on economic activity and fuel demand.
The American Petroleum Institute (API), the leading US trade organization representing the oil and gas sector, released the following industry updates. Data shows domestic crude stock levels fell by 4.49 million barrels for the week ending May 2.
Mike McGlone, senior commodity strategist at Bloomberg Intelligence, noted the growing divergence between oil and gold prices. In his opinion, this trend signals further deterioration of economic conditions and a probability of a global recession.
On Monday, oil prices hit a four-year low after the Organization of the Petroleum Exporting Countries (OPEC) and its allies agreed to another production increase in June. The alliance plans to further boost crude output, Reuters reports.
Reuters reports that oil rose on Wednesday amid signs of increased demand in China and Europe, as well as lower US production.
A decrease of the indicator value may contribute to the rise in quotes of WTI, Brent.
Major oil and gas manufacturers are not going to cut their budgets, regardless of the decline in oil prices. Despite the downturn in profitability, leading firms are showing an upturn in production volumes.
US President Donald Trump’s administration intends to hold a lease sale in the Gulf of Mexico in June this year. Head of the National Ocean Industries Association, Erik Milito, forecasts crude production in the Gulf of Mexico to rise to 2.4 million barrels per day.
Saudi Arabia declared the intension to secure its foothood as the world’s largest oil manufacturer. The announcement followed the statements of the Energy Minister — Prince Abdulaziz bin Salman.
Diamondback Energy, the largest independent producer in the Permian Basin, says US shale oil production has likely hit its peak and is expected to decline in the coming months due to the sharp drop in crude prices.
Oil prices surged from a four-year low on Tuesday. According to Bloomberg, technical analysis suggests that crude recently entered oversold territory.
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Oil price movements are more than just charts on a screen. It is one of the key drivers of the global economy. Understanding these dynamics helps in making rational decisions and adapting to changes.
