Eight OPEC+ producers accelerate crude oil output hikes, pushing oil prices 6% lower
Eight key OPEC+ producers on Thuesday agreed to raise combined crude oil output by 411,000 barrels per day, speeding up the pace of their scheduled hikes and pushing down oil prices.
The Ice Brent contract with June delivery was trading at $70.50 per barrel at 1:32 p.m. London time (8:32 a.m. ET), down 5.94% from the Wednesday close. The front-month May Nymex WTI contract was at $67.11 per barrel, 6.41% lower.
Saudi Arabia, Russia, Iraq, UAE, Kuwait, Kazakhstan, Algeria, and Oman met virtually to review global market conditions and decided to raise collective output by 411,000 barrels per day, starting in May. The group was widely expected to implement an increase of just under 140,000 barrels per day next month.
The May hike agreed on Thursday is 'equivalent to three monthly increments,' OPEC said in a statement, adding that 'the gradual increases may be paused or reversed subject to evolving market conditions.'
The eight OPEC+ producers this month started gradually unwinding 2.2 million barrels per day of voluntary cuts undertaken independently from the production strategy of the broader 22-member OPEC+ alliance, which has roughly 3.66 million barrels per day of separate cuts in place until the end of 2026.
The Thursday meeting was the first one attended by Erlan Akkenzhenov, the new energy minister of Kazakhstan, which has struggled with producing above its assigned quota.
Without referencing individual countries, OPEC said in its Thursday statement that the May output hike will 'provide an opportunity for the participating countries to accelerate their compensation' by way of additional production cuts in line with overproduction.
The Thursday decision was taken against the backdrop of broader market tumult triggered by sweeping tariffs on key trade partners unveiled on Wednesday by the administration of U.S. President Donald Trump, who has been simultaneously championing higher U.S. oil output.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Reuters
7 minutes ago
- Reuters
Wall Street futures slip after Trump's steel, aluminum tariff threats
June 2 (Reuters) - U.S. stock index futures dipped on Monday after President Donald Trump announced plans to double tariffs on imported steel and aluminum, amplifying concerns about trade- and tariff-related volatility. Trump said on late Friday he planned to increase tariffs on imported steel and aluminum to 50% from 25% starting Wednesday, just hours after he accused China of violating an agreement. The increased levies would deepen Trump's global trade war and douses some enthusiasm stemming from a softening in his trade stance. Last month, a temporary relief on some levies on China and a rollback of steep tariff threats on the European Union, along with strong earnings and improving economic data helped the benchmark S&P 500 log its best monthly performance in 18 months. Shares of U.S. Steel companies rose in premarket trading, with Cleveland-Cliffs (CLF.N), opens new tab jumping 26.2%, Nucor (NUE.N), opens new tab up 14.1% and Steel Dynamics (STLD.O), opens new tab 13.4% higher. "It is really hard to keep up or predict what's going to happen on trade at the moment, and that's before we factor in the full ramifications from the court ruling last Thursday night, and then subsequent brief stay of execution for them on appeal," Jim Reid, global head of macro and thematic research at Deutsche Bank, said in a note. A federal appeals court on Thursday temporarily reinstated most of Trump's 'Liberation Day' tariffs blocked by the Court of International Trade, the day prior. "For now, it seems likely that the tariff uncertainty will linger for a long time ahead even if we're still likely past the peak aggressiveness of U.S. policy," Reid said. At 5:22 a.m. ET, Dow E-minis were down 218 points, or 0.52%, S&P 500 E-minis were down 34 points, or 0.57%. Nasdaq 100 E-minis were down 156.5 points, or 0.73% Most megacap and growth stocks were down, with Tesla (TSLA.O), opens new tab leading losses after it reported lower monthly sales in Portugal, Denmark and Sweden. The stock was last down 2%. Focus would be on comments from Fed Chair Jerome Powell later in the day as he presents opening remarks before the Federal Reserve Board International Finance Division's 75th anniversary conference at 1:00 p.m. ET (1700 GMT). Federal Reserve Governor Christopher Waller said on Monday that interest rate cuts remain possible later this year even with the Trump administration's tariffs likely to push up price pressures temporarily. On the data front, a reading of S&P Global U.S. manufacturing PMI is due at 9:45 a.m. ET and an ISM Manufacturing index reading is scheduled for 10:00 a.m. ET. Ahead in the week, investors await a crucial nonfarm-payrolls report due on Friday to ascertain strength in the U.S. economy amid tariff volatility. Among other stocks, Moderna (MRNA.O), opens new tab rose 4.6% after the U.S. Food and Drug Administration approved its next-generation COVID-19 vaccine for everyone aged 65 and above. Separately, RBC Capital Markets raised its year-end target for the S&P 500 index (.SPX), opens new tab to 5,730 from 5,550, citing modestly improved U.S. economic outlook and stronger-than-expected corporate earnings.
Leader Live
7 minutes ago
- Leader Live
UK manufacturing shrinks again but may be ‘turning a corner'
Factories saw the recent downturn linked to trade tensions, US tariffs and higher costs slow down during May but highlighted that confidence was still 'subdued'. The S&P Global UK manufacturing PMI survey, watched closely by economists, showed a reading of 46.4 in May, up from 45.4 in April. Any reading above 50 indicates that activity is growing while any score below means it is contracting. The sector is, therefore, still contracting, but at a slower rate. It was a stronger performance than expected, with economists having predicted a reading of 45.1 for the month. Rob Dobson, director at S&P Global Market Intelligence, said: 'May PMI data indicate that UK manufacturing faces major challenges, including turbulent market conditions, trade uncertainties, low client confidence and rising tax-related wage costs. 'Downturns in output, new orders and new export business have continued, and business optimism has stayed subdued by the historical standards of the survey. 'There are some signs of manufacturing turning a corner, though. 'PMI indices tracking output and new orders have moved higher in each of the past two months, suggesting the downturn is easing, and came in better than the earlier flash estimates for May.' Firms saw factory production contract again as companies scaled back production due to a reduction in new work, both in the UK and from overseas clients. Total new business volumes also decreased further, although this was at a slower rate than the previous month. Weak global market conditions, trade uncertainty, low customer confidence and cost pressures linked to the recent rise in employer national insurance contributions were all linked to the continued decline. However, some firms indicated that warmer weather conditions helped support positive sales in May. The latest figures come amid continued uncertainty over US President Donald Trump's tariff plans, which continued to change in recent weeks. Mr Trump said a new 50% import tariff on steel and aluminium will come into force on Wednesday. The US agreed earlier this month that it will ultimately drop these tariffs from imports of these products from the UK, but firms in these sectors are now expected to face the 50% rate until the details on UK-US deal are confirmed.
Times
9 minutes ago
- Times
Pound and gold rise as dollar falls on increased trade tensions
The pound rose to a fresh three-year high against the dollar, and gold headed back toward an all-time high on Monday after President Trump went back on the offensive in his trade war. Sterling strengthened 0.73 per cent to $1.355, its highest since the middle of 2022 and taking its gains against the dollar since the start of the year to more than 8 per cent. The pound also strengthened 0.08 per cent against the euro to €1.18, but is down 1.76 per cent against the currency since the start of the year. Safe-haven buying pushed the gold price up 1.75 per cent to $3,349.65 per ounce. Geopolitical and trade tensions saw gold hit an all-time intraday high of $3,500.05 on April 22. Investors ditched the dollar following an escalation in tensions between Washington and Beijing as a pause in the tit-for-tat tariffs between the countries looked to have ended. The dollar fell 0.66 per cent against a basket of currencies and is down by nearly 9 per cent over the past six months. On Monday, China accused the United States of 'seriously violating' a trade truce after Trump last week, in a post on Truth Social, said that 'China, perhaps not surprisingly to some, HAS TOTALLY VIOLATED ITS AGREEMENT WITH US'. Last month, after talks in Geneva, China and the US agreed to lower tariffs on each other's imported goods by 115 percentage points for 90 days. The intention behind the temporary tariff climbdown was to cool relations to open up space for trade talks. Analysts at Deutsche Bank, the German investment bank, said: 'It is really hard to keep up or predict what's going to happen on trade at the moment, and that's before we factor in the full ramifications from the court ruling last Thursday night, and then subsequent brief stay of execution for them on appeal.' Last week, a US trade court ruled that Trump's 'reciprocal tariffs' were illegal, before an appeals court temporarily reinstated them. The White House has said it intends to overturn the original ruling. 'For now it seems likely that the tariff uncertainty will linger for a long time ahead, even if we're still likely past the peak aggressiveness of US policy', Deutsche Bank said. Trump has sharpened his commitment to protectionist policies after gradually walking back their most onerous elements in recent weeks. Late last week, the President announced that charges on imported steel and aluminium would double to 50 per cent from 25 per cent. Oil rose sharply, with the price of Brent crude, the international benchmark, up 3.27 per cent to $64.81 a barrel after OPEC+, the oil cartel, decided to increase output in July by the same amount as it did in each of the prior two months. Traders said that was a relief to those who had expected a bigger increase. The FTSE 100 rose by 0.06 per cent and the mid-cap FTSE 250 edged up 0.06 per cent. The yield on the ten-year UK government bond rose 4 basis points to 4.69 per cent.
