Oil Prices Lose 6.6% amid Tariffs, Production Increase
Taarek Refaat
Oil prices have plunged further after President Donald Trump's tariffs and OPEC+'s decision to increase production at a faster rate than previously announced, leading to their worst decline since 2022.
Brent crude futures fell 6.42% to settle at $70.14 a barrel. US crude futures also fell 6.64% to settle at $66.95 a barrel. Also, West Texas Intermediate (WTI) fell below $67 a barrel, after losing 6.6% on Thursday, while Brent crude closed near $70.
This marked Brent's worst decline since August 1, 2022, while US crude recorded its worst decline since July 11, 2022.
Latest Oil Prices:
WTI Crude $66.28 -1.00%
Brent Crude $69.48 -0.94%
Murban Crude $71.91 -0.62%
Louisiana Light $76.41 +4.03%
Bonny Light $78.62 -2.84%
Mars US $72.90 -1.51%
Gasoline $2.140 -1.10%
Natural Gas $4.101 -0.89%
The OPEC+ alliance has decided to increase oil production by more than previously estimated starting in May, benefiting from improved market indicators and increased global demand for crude, according to an official statement posted on its website after a virtual meeting held today.
The alliance said it will increase production by approximately 411,000 barrels per day, equivalent to three months of planned increases, exceeding the previously planned increase for May alone, with flexibility to adjust or halt this rate depending on market developments.
The surprise decision deepened the slide in oil prices, which had already begun following US President Donald Trump's announcement on Wednesday of historic tariffs.
While lower oil prices may ease inflationary pressures on central banks, they also highlight broader concerns about growth prospects, which have prompted companies across the sector to lower their forecasts in recent weeks.
In the latest warning about the impact of these tariffs on growth, International Monetary Fund Managing (IMF) Director Kristalina Georgieva considered the reciprocal US tariffs a significant risk to the global economy, especially given the slowdown in growth.
In a statement, she urged avoiding steps that could further damage the economic recovery, urging the US and its trading partners to work together to resolve tensions and reduce uncertainty.
"The perfect mix of pessimism has prevailed in Washington and Vienna," Bloomberg quoted Tamas Varga, an analyst at brokerage PVM Oil Associates Ltd. He added, "Reciprocal tariffs on virtually all of the United States' major trading partners are justifiably raising fears of recession and possibly stagflation. Economic growth and oil demand growth are being negatively impacted."
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