Latest news with #Opec
Malay Mail
11 hours 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
Malaysiakini
17 hours ago
- Business
- Malaysiakini
Eight Opec+ nations to hike oil production by 411,000 barrels per day in july
The eight Opec+ countries that voluntarily restricted their oil production agreed on Saturday to increase their combined output by 411,000 barrels per day in July from the June level, reported Sputnik/RIA Novosti. Saudi Arabia, Russia, Iraq, the United Arab Emirates, Kuwait, Kazakhstan, Algeria and Oman met virtually to discuss the global market conditions. "The eight participating countries will...
The National
a day ago
- Business
- The National
Opec+ agrees another accelerated oil output for July
Opec+ has agreed to maintain its monthly oil output of 411,000 barrels per day for July, as it boosts supply amid trade tension-induced economic uncertainty. Analysts say the move is a possible gesture to appease US President Donald Trump's desire for lower crude prices. The hike marks the third consecutive month that the group, led by Saudi Arabia and Russia, will raise production at the same level, Opec+ said in a statement following a virtual meeting on Saturday. The decision was "in view of a steady global economic outlook and current healthy market fundamentals, as reflected in the low oil inventories", the group said. Opec+ noted that gradual increases may be paused or reversed "subject to evolving market conditions", giving them the "flexibility will allow the group to continue to support oil market stability". The accelerated unwinding of Opec+'s own restriction programme is expected to boost the market's supply surplus into the second half of 2025 "when demand prospects are fragilised by trade tensions", Ipek Ozkardeskaya, a senior analyst at Swissquote Bank, told The National. Mr Trump, meanwhile, has repeatedly called for lower oil prices to boost the domestic US oil industry. "We don't yet know if Opec+'s latest moves are to please Mr Trump or to [align] certain members" with the group's quotas, Ms Ozkardeskaya said. "Yet the rising supply will likely continue to apply negative pressure on prices – unless there is a sudden shift in the tariff picture like ruling of the tariffs." Oil prices started 2025 strongly. The closing price of Brent, the benchmark for two thirds of the world's oil, peaked at more than $82 a barrel on January 15, while West Texas Intermediate, the gauge that tracks US crude, hit almost $79 per barrel also on that day. However, crude prices have since waffled and have been particularly jolted by Mr Trump's sweeping global tariffs that he announced on April 2, which have disrupted stock markets and reignited fears of a global recession, especially as US trade partners – most notably China – unleashed retaliatory levies. Since then, Brent and WTI have slipped more than 16 per cent and 15 per cent, respectively, and the uncertainty surrounding Mr Trump's flip-flopping over his tariff policies have put pressure on oil prices. In March, Opec+ said it would proceed with a 'gradual and flexible' unwinding of voluntary production cuts of 2.2 million bpd starting in April, adding 138,000 bpd per month until September 2026. The planned return of production cuts – originally made by eight Opec+ members, including Saudi Arabia, Russia, the UAE and Iraq, in November 2023 – had been pushed back several times amid concerns about growing supply in the market. In March, the alliance released a new schedule for seven member nations to make further oil output cuts to compensate for exceeding their quotas. The plan includes monthly cuts ranging from 189,000 bpd to 435,000 bpd, with the reductions scheduled to last until June 2026. Opec has been losing global market share in recent years. In 2024, their output was less than 27 million bpd, down from 30 million bpd a decade ago and after having peaked of 34 million bpd in 2016. "In addition to trying to enforce stronger discipline within the group, Opec sees [increasing output] as a good opportunity to place pressure on higher cost oil producers, including US shale, and win back some market share," analysts at Jadwa Investment said. "This policy has the added benefit of bolstering good relations with the US given President Trump's stated desire for lower oil prices to bring down inflation in the US and force a diplomatic solution to the Russia-Ukraine war." How Opec+ policy evolves during 2025 will largely depend on internal compliance issues and the broader developments in the oil market, with hikes seen to scale down should global crude inventories start to build up, they added. The UAE's Minister of Energy and Infrastructure, Suhail Al Mazrouei, this week said Opec+ should be 'mindful' about oil demand, and that the group is 'doing their best' to balance the market and ensure there is enough investment into the supply. Mr Al Mazrouei's comments are "constructive", said Giovanni Staunovo, a strategist at Swiss bank UBS. "Opec+ crude exports are stable versus April, suggesting higher compliance and domestic demand keeps exports in check," the told The National. At its ministerial meeting on Wednesday, Opec reiterated its "continued commitment ... to achieve and sustain a stable oil market".
South China Morning Post
a day ago
- Business
- South China Morning Post
Opec+ agrees on sharp increase in July oil production to deepen price slump
Opec+ has agreed to surge oil output by 411,000 barrels a day for the third month in a row, doubling down on a historic policy shift that has sent crude prices sinking. Advertisement Key nations led by Saudi Arabia agreed during a video conference on Saturday to add that amount to the market in July, according to delegates. The surge follows equally sized increases scheduled for May and June, marking a clear break with years of efforts by the group to support global oil prices. 'Opec+ isn't whispering any more,' said Jorge Leon, an analyst at Rystad Energy A/S, who previously worked at the Opec secretariat. 'May hinted, June spoke clearly, and July came with a megaphone.' In a statement issued after the meeting, Opec+ cited a 'steady global economic outlook and current healthy market fundamentals, as reflected in the low oil inventories' as its reasoning for the July increase. While there was ultimately a consensus for the July increase, some members expressed reservations. During Saturday's discussions, Russia was among members that recommended a pause in the supply increases, delegates said, asking not to be named because the information was private. Advertisement Oil briefly crashed to a four-year low under US$60 a barrel in April after the Organization of the Petroleum Exporting Countries (Opec) and its allies first announced that they would bolster output by triple the scheduled amount, even as faltering demand and President Donald Trump's trade war were already crushing the market.
The National
a day ago
- Business
- The National
UAE petrol prices remain steady in June as diesel falls again
Petrol prices in the UAE will remain steady in June, while diesel will fall for a second month in a row, authorities announced on Saturday. It will be the second month that gasoline fuels will remain unchanged in 2025 after a similar decision for January. Prices then rose by about 5 per cent in February, before decreasing in March and April. In May, diesel fell while other fuel products marginally rose. So far this year, petrol prices are down by about 1.1 per cent, while diesel has fallen by more than 8.5 per cent. How much will fuel cost in June 2025? The breakdown of fuel prices a litre for next month is as follows: Super 98: Dh2.58, unchanged from May Special 95: Dh2.47, unchanged from May Diesel: Dh2.45, an increase of 2.8 per cent from Dh2.52 in April E-Plus 91: Dh2.39, unchanged from May The UAE deregulated fuel prices in 2015, aligning them with market fluctuations. Fuel prices in the UAE are tied to movements in the global oil market, which has experienced significant volatility since the beginning of the year. Concerns about a global economic slowdown due to US President Donald Trump's tariffs on trade partners, and retaliatory measures, have put pressure on oil prices. Oil prices slipped on Friday and posted a second consecutive weekly decline as the Opec+ alliance prepares for its meeting this weekend, where it is expected to announce its third major output increase. Brent, the benchmark for two thirds of the world's crude, fell 0.39 per cent to settle at $63.90 per barrel. West Texas Intermediate, the gauge that tracks US crude, dropped 0.25 per cent to close at $60.79 a barrel. The oil alliance's meeting on Saturday to decide on July's production levels comes amid global trade tensions that have cooled demand prospects, analysts say. This week, UAE Minister of Energy and Infrastructure Suhail Al Mazrouei said that despite a growing focus on renewable energy, Opec+ should be 'mindful' about oil demand. The group, led by Saudi Arabia and Russia, is 'doing its best' to balance the market and ensure there is enough investment into supply, he said.
