Oil halts decline after Saudi Arabia’s announcements of plans to increase production
On May 1, oil prices stabilized after a previous decline. This was a reaction to Saudi Arabia’s statement about a possible increase in production and the release of data on the contraction of the US economy. About this informs Reuters.
Brent crude futures rose 7 cents, or 0.1%, to $61.13 a barrel. The cost of US West Texas Intermediate crude rose by 1 cent, or 0.02%, to settle at $58.22 a barrel. On Wednesday, the price of WTI reached its lowest level since March 2021.
“The dual impact of deteriorating demand and future supply expansion has created a pessimistic outlook for crude oil, with Brent appearing vulnerable to a test of $55 a barrel”,” said Sugandha Sachdeva, founder of New Delhi-based research firm SS WealthStreet.
Saudi Arabia is telling its allies and industry analysts that it has no intention of propping up the oil market with further supply cuts and is prepared to endure a period of prolonged price declines. It is expected that several OPEC+ countries during the meeting on May 5 will offer the group a second consecutive increase in production volumes in June.
At the same time, the US economy contracted in the first quarter for the first time in three years. That came amid a surge in imports driven by companies seeking to avoid higher costs due to tariffs, which analysts say shows the negative impact of President Donald Trump’s unpredictable trade policies.
