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Qatar Tribune
5 days ago
- Business
- Qatar Tribune
Oil below $65 comes as boon for consumers, but burden on producers
Agencies U.S. President Donald Trump's tariffs, his famous call to 'drill baby drill,' but particularly a decision by a group of the world's top producers to hike crude output quotas have oil prices trading at lows not seen since the COVID-19 pandemic. That is good news for consumers but not so much for producers, analysts say. A barrel of Brent North Sea crude, the international benchmark, stands below $65, a far cry from the more than $120 reached in 2022 following the invasion of Ukraine by major oil producer Russia. The fall in oil prices has contributed to a global slowdown for inflation, while also boosting growth in countries reliant on importing crude, such as much of Europe. The U.S. Consumer Price Index, for example, was down 11.8% year-over-year in April. Cheaper crude 'increases the level of disposable income' consumers have to be spending on 'discretionary items' such as leisure and tourism, said Pushpin Singh, an economist at British research group Cebr. The price of Brent has fallen by more than $10 compared with a year ago, reducing the cost of various fuel types derived directly from oil. This is helping to push down transportation and manufacturing costs that may, in the medium term, help further cut prices of consumer goods, Singh told Agence France-Presse (AFP). But he noted that while the drop in crude prices is partly a consequence of Trump's trade policies, the net effect on inflation remains difficult to predict amid threatened surges to other input costs, such as metals. At the same time, 'cheaper oil can make renewable energy sources less competitive, potentially slowing investment in green technologies,' Singh prices retreat, however, the undisputed losers are oil-producing countries, 'especially high-cost producers who at current and lower prices are forced to scale back production in the coming months,' said Ole Hansen, head of commodity strategy at Saxo Bank. Oil trading close to or below $60 'will obviously not be great for shale producers' either, said Rystad Energy analyst Jorge Leon. 'Having lower oil prices is going to be the detriment to their development,' he told companies extracting oil and natural gas from shale rock have already announced reduced investment in the Permian Basin, located between Texas and New Mexico. For the OPEC+ oil alliance, led by Saudi Arabia and Russia, tolerance for low prices varies Arabia, the United Arab Emirates (UAE) and Kuwait have monetary reserves allowing them to easily borrow to finance diversified economic projects, Leon said. Hansen forecast that 'the long-term winners are likely to be major OPEC+ producers, especially in the Middle East, as they reclaim market shares that were lost since 2022 when they embarked on voluntary production cuts.' OPEC+ includes the countries members of the Organization of the Petroleum Exporting Countries (OPEC) and allies such as Russia. The 22-nation group began a series of cuts in 2022 to prop up crude prices, but Saudi Arabia, Russia and six other members surprised markets recently by sharply raising output. On Saturday, the countries announced a huge increase in crude production for July with an additional 411,000 barrels a day, the same target set for May and then June, according to a statement, which is more than three times greater than the group had previously planned. In recent years, the group within OPEC+ that is known as the 'Voluntary Eight,' or V8, had agreed to daily reductions of 2.2 million barrels with the aim of boosting prices. But in early 2025, OPEC+ members decided on the gradual output increase and subsequently began to accelerate the pace. Analysts say the hikes have likely been aimed at punishing OPEC members that have failed to meet their quotas, but it also follows pressure from Trump to lower prices. That is directly impacting the likes of Iran and Venezuela, whose economies depend heavily on oil revenues. A lower-price environment also hurts Nigeria, which, like other OPEC+ members, possesses a more limited ability to borrow funds, according to experts. But non-OPEC member Guyana, whose gross domestic product (GDP) growth has surged in recent years thanks to the discovery of oil, risks seeing its economy slow.
Japan Today
5 days ago
- Business
- Japan Today
Oil under $65 a boon for consumers, but a burden on producers
Cargo ships outside an oil and gas storage facility at a port in Luanda, the capital of Angola By Pol-Malo LE BRIS U.S. President Donald Trump's tariffs, his call to "drill baby drill" and especially a decision by OPEC+ to hike crude output quotas have oil prices trading at lows not seen since the COVID pandemic. That is good news for consumers but not so much for producers, analysts say. A barrel of Brent North Sea crude, the international benchmark, stands below $65, a far cry from the more than the $120 reached in 2022 following the invasion of Ukraine by major oil producer Russia. Lower inflation The fall in oil prices has contributed to a global slowdown for inflation, while also boosting growth in countries reliant on importing crude, such as much of Europe. The U.S. consumer price index, for example, was down 11.8 percent year-on-year in April. Cheaper crude "increases the level of disposable income" consumers have to be spending on "discretionary items" such as leisure and tourism, said Pushpin Singh, an economist at British research group Cebr. The price of Brent has fallen by more than $10 compared with a year ago, reducing the cost of various fuel types derived directly from oil. This is helping to push down transportation and manufacturing costs that may, in the medium term, help further cut prices of consumer goods, Singh told AFP. But he noted that while the drop in crude prices is partly a consequence of Trump's trade policies, the net effect on inflation remains difficult to predict amid threatened surges to other input costs, such as metals. At the same time, "cheaper oil can make renewable energy sources less competitive, potentially slowing investment in green technologies", Singh added. Oil producers As prices retreat however the undisputed losers are oil-producing countries, "especially high-cost producers who at current and lower prices are forced to scale back production in the coming months", said Ole Hansen, head of commodity strategy at Saxo Bank. Oil trading close to or below $60 "will obviously not be great for shale producers" either, said Rystad Energy analyst Jorge Leon. "Having lower oil prices is going to be the detriment to their development," he told AFP. Some companies extracting oil and natural gas from shale rock have already announced reduced investment in the Permian Basin, located between Texas and New Mexico. For the OPEC+ oil alliance, led by Saudi Arabia and Russia, tolerance for low prices varies greatly. Saudi Arabia, the United Arab Emirates and Kuwait have monetary reserves allowing them to easily borrow to finance diversified economic projects, Leon said. Hansen forecast that "the long-term winners are likely to be major OPEC+ producers, especially in the Middle East, as they reclaim market shares that were lost since 2022 when they embarked on voluntary production cuts". The 22-nation group began a series of cuts in 2022 to prop up crude prices, but Saudi Arabia, Russia and six other members surprised markets recently by sharply raising output. On Saturday, the countries announced a huge increase in crude production for July with an additional 411,000 barrels a day. Analysts say the hikes have likely been aimed at punishing OPEC members that have failed to meet their quotas, but it also follows pressure from Trump to lower prices. That is directly impacting the likes of Iran and Venezuela, whose economies depend heavily on oil revenues. A lower-price environment also hurts Nigeria, which like other OPEC+ members possesses a more limited ability to borrow funds, according to experts. Bit non-OPEC member Guyana, whose GDP growth has surged in recent years thanks to the discovery of oil, risks seeing its economy slow. © 2025 AFP
Time of India
5 days ago
- Business
- Time of India
Oil prices hits four-year low; consumers gain, producers brace for impact
Representative image The falling oil prices, influenced by US President Donald Trump 's policies and OPEC+'s increased output quotas, have pushed crude costs to their lowest since the Covid pandemic, benefiting consumers whilst creating challenges for producers. Brent North Sea crude currently trades below $65, significantly lower than the $120 peak witnessed in 2022 after Russia's invasion of Ukraine. The declining oil prices have helped reduce global inflation and stimulated growth in oil-importing nations, particularly in Europe. In the US, the consumer price index dropped 11.8 percent year-on-year in April. As Pushpin Singh, an economist at Cebr explained, reduced crude prices enhance consumers' "discretionary items" spending capacity. The Brent price decrease of over $10 from last year has lowered various fuel costs, potentially reducing consumer goods prices through decreased transportation and manufacturing expenses. While Trump's trade policies have influenced oil prices, the overall impact on inflation remains uncertain due to potential increases in other resource costs. Singh also noted that lower oil prices could diminish the appeal of renewable energy investments. Oil-producing nations face significant challenges, particularly high-cost producers who must reduce production, according to Ole Hansen from Saxo Bank. Shale producers are especially vulnerable when prices approach $60, with some firms already reducing investments in the Permian Basin. OPEC+ members show varying resilience to low prices. Saudi Arabia, UAE, and Kuwait maintain substantial monetary reserves, whilst Iran, Venezuela, and Nigeria face greater economic pressures due to limited borrowing capacity. Eight major OPEC+ members, including Saudi Arabia and Russia, announced on Saturday their plans to substantially increase crude oil output for July. The coalition's statement confirmed they would maintain the previously established target of 411,000 barrels per day, which was also set for May and June. This revised production target represents more than three times the volume originally proposed by the alliance. Read more: OPEC+ announces major July output hike as oil prices fall to four-year low The recent OPEC+ decision to production by 411,000 barrels daily appears aimed at disciplining quota-breaching members, whilst responding to Trump's pressure for lower prices. This strategy particularly affects economically vulnerable OPEC members and could impact non-OPEC producers like Guyana, whose recent economic growth has relied heavily on oil revenues. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
Economic Times
6 days ago
- Business
- Economic Times
Oil under $65 a boon for consumers, but a burden on producers
A pump jack operates near a crude oil reserve in the Permian Basin oil field near Midland, Texas. Synopsis Oil prices have plummeted to pandemic-era lows due to factors like Trump's tariffs, increased OPEC+ output, and calls to boost drilling. This benefits consumers through lower inflation and increased disposable income, but it hurts oil-producing nations, especially high-cost producers and those heavily reliant on oil revenues. US President Donald Trump's tariffs, his call to "drill baby drill" and especially a decision by OPEC+ to hike crude output quotas have oil prices trading at lows not seen since the Covid pandemic. ADVERTISEMENT That is good news for consumers but not so much for producers, analysts say. A barrel of Brent North Sea crude, the international benchmark, stands below $65, a far cry from the more than the $120 reached in 2022 following the invasion of Ukraine by major oil producer Russia. The fall in oil prices has contributed to a global slowdown for inflation, while also boosting growth in countries reliant on importing crude, such as much of Europe. The US consumer price index, for example, was down 11.8 percent year-on-year in crude "increases the level of disposable income" consumers have to be spending on "discretionary items" such as leisure and tourism, said Pushpin Singh, an economist at British research group Cebr. ADVERTISEMENT The price of Brent has fallen by more than $10 compared with a year ago, reducing the cost of various fuel types derived directly from is helping to push down transportation and manufacturing costs that may, in the medium term, help further cut prices of consumer goods, Singh told AFP. ADVERTISEMENT But he noted that while the drop in crude prices is partly a consequence of Trump's trade policies, the net effect on inflation remains difficult to predict amid threatened surges to other input costs, such as the same time, "cheaper oil can make renewable energy sources less competitive, potentially slowing investment in green technologies", Singh added. ADVERTISEMENT As prices retreat however the undisputed losers are oil-producing countries, "especially high-cost producers who at current and lower prices are forced to scale back production in the coming months", said Ole Hansen, head of commodity strategy at Saxo Bank. Oil trading close to or below $60 "will obviously not be great for shale producers" either, said Rystad Energy analyst Jorge Leon. ADVERTISEMENT "Having lower oil prices is going to be the detriment to their development," he told companies extracting oil and natural gas from shale rock have already announced reduced investment in the Permian Basin, located between Texas and New the OPEC+ oil alliance, led by Saudi Arabia and Russia, tolerance for low prices varies Arabia, the United Arab Emirates and Kuwait have monetary reserves allowing them to easily borrow to finance diversified economic projects, Leon forecast that "the long-term winners are likely to be major OPEC+ producers, especially in the Middle East, as they reclaim market shares that were lost since 2022 when they embarked on voluntary production cuts".The 22-nation group began a series of cuts in 2022 to prop up crude prices, but Saudi Arabia, Russia and six other members surprised markets recently by sharply raising Saturday, the countries announced a huge increase in crude production for July with an additional 411,000 barrels a day. Analysts say the hikes have likely been aimed at punishing OPEC members that have failed to meet their quotas, but it also follows pressure from Trump to lower prices. That is directly impacting the likes of Iran and Venezuela, whose economies depend heavily on oil revenues.A lower-price environment also hurts Nigeria, which like other OPEC+ members possesses a more limited ability to borrow funds, according to experts. Bit non-OPEC member Guyana, whose GDP growth has surged in recent years thanks to the discovery of oil, risks seeing its economy slow. (You can now subscribe to our Economic Times WhatsApp channel) oiloil pricestrumpopeccrude oilbrent prices (Catch all the US News, UK News, Canada News, International Breaking News Events, and Latest News Updates on The Economic Times.) Download The Economic Times News App to get Daily International News Updates. 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Malay Mail
6 days ago
- Business
- Malay Mail
Oil slides below US$65 bringing inflation relief — and trouble for producers
LONDON, June 1 — US President Donald Trump's tariffs, his call to 'drill baby drill' and especially a decision by Opec+ to hike crude output quotas have oil prices trading at lows not seen since the Covid pandemic. That is good news for consumers but not so much for producers, analysts say. A barrel of Brent North Sea crude, the international benchmark, stands below US$65 (RM276), a far cry from the more than the US$120 reached in 2022 following the invasion of Ukraine by major oil producer Russia. Lower inflation The fall in oil prices has contributed to a global slowdown for inflation, while also boosting growth in countries reliant on importing crude, such as much of Europe. The US consumer price index, for example, was down 11.8 per cent year-on-year in April. Cheaper crude 'increases the level of disposable income' consumers have to be spending on 'discretionary items' such as leisure and tourism, said Pushpin Singh, an economist at British research group Cebr. The price of Brent has fallen by more than US$10 compared with a year ago, reducing the cost of various fuel types derived directly from oil. This is helping to push down transportation and manufacturing costs that may, in the medium term, help further cut prices of consumer goods, Singh told AFP. But he noted that while the drop in crude prices is partly a consequence of Trump's trade policies, the net effect on inflation remains difficult to predict amid threatened surges to other input costs, such as metals. At the same time, 'cheaper oil can make renewable energy sources less competitive, potentially slowing investment in green technologies', Singh added. Oil producers As prices retreat however the undisputed losers are oil-producing countries, 'especially high-cost producers who at current and lower prices are forced to scale back production in the coming months', said Ole Hansen, head of commodity strategy at Saxo Bank. Oil trading close to or below US$60 'will obviously not be great for shale producers' either, said Rystad Energy analyst Jorge Leon. 'Having lower oil prices is going to be the detriment to their development,' he told AFP. Some companies extracting oil and natural gas from shale rock have already announced reduced investment in the Permian Basin, located between Texas and New Mexico. For the Opec+ oil alliance, led by Saudi Arabia and Russia, tolerance for low prices varies greatly. Saudi Arabia, the United Arab Emirates and Kuwait have monetary reserves allowing them to easily borrow to finance diversified economic projects, Leon said. Hansen forecast that 'the long-term winners are likely to be major Opec+ producers, especially in the Middle East, as they reclaim market shares that were lost since 2022 when they embarked on voluntary production cuts'. The 22-nation group began a series of cuts in 2022 to prop up crude prices, but Saudi Arabia, Russia and six other members surprised markets recently by sharply raising output. On Saturday, the countries announced a huge increase in crude production for July with an additional 411,000 barrels a day. Analysts say the hikes have likely been aimed at punishing Opec members that have failed to meet their quotas, but it also follows pressure from Trump to lower prices. That is directly impacting the likes of Iran and Venezuela, whose economies depend heavily on oil revenues. A lower-price environment also hurts Nigeria, which like other Opec+ members possesses a more limited ability to borrow funds, according to experts. Bit non-Opec member Guyana, whose GDP growth has surged in recent years thanks to the discovery of oil, risks seeing its economy slow. — AFP
