Latest news with #Opec+'
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Business Standard
6 days ago
- Business
- Business Standard
Why are crude oil prices rising? Check reasons, outlook & trading strategy
Short term supply fear drives oil prices higher Oil prices began June on a strong footing, rising by 5 per cent in just two trading sessions. This surge has largely overshadowed Opec+'s recent decision to increase output by 433,000 barrels per day (bpd) in July. Brent crude, the global benchmark, is holding above $65, while US crude (WTI) has risen above $63. The rally is primarily driven by short-term supply concerns rather than a significant increase in demand. Wht are oil prices rising? One of the key factors fueling this rally is the outbreak of wildfires in Alberta, Canada's primary oil-producing region, which accounts for 80 per cent of the country's output. The fires have forced the suspension of approximately 350,000 bpd, or 7 per cent of Canada's daily production. A similar event in 2024 disrupted 400,000 bpd and contributed to a spike in global oil prices. In addition to the Canadian disruption, geopolitical tensions are adding to supply fears. Uncertainty surrounding a potential nuclear deal with Iran and the increasing vulnerability of Russian oil infrastructure to Ukrainian drone attacks have heightened concerns about global supply stability. Meanwhile, Opec+ announced on May 31, 2025, that it would raise crude oil output for the third consecutive month, despite internal disagreements led by Russia. Saudi Arabia is aggressively pursuing market share, which has exerted downward pressure on prices. The group plans to increase production by 411,000 bpd in July, having already restored 1.37 million bpd of the planned 2.2 million bpd by the end of 2026. As of May, the global oil market is in surplus by approximately 0.5 million bpd, a figure expected to exceed 1 million bpd by year-end. The next Opec+ meeting is scheduled for July 6, 2025, where the group will decide on August production levels. Opec+ has emphasised flexibility, indicating that production increases could be paused or reversed depending on market conditions. In the United States, lower crude prices are beginning to impact energy producers. The latest Baker Hughes data shows that the US oil rig count fell by four to 461, marking the fifth consecutive weekly decline and a 6 per cent year-over-year drop. The Permian Basin, which accounts for 46 per cent of US crude oil production, has seen a 22 per cent decline in rig count by the end of May. Some fields in the region have breakeven costs as high as $96 per barrel. While production from the Gulf Coast remains stable at around 1.8 to 1.9 million bpd, contributing 22–25 per cent of total US output, overall US crude production has slipped slightly below its March peak of 13.45 million bpd. Oil demand outlook On the demand side, signs of a slowdown are becoming evident. In the US, the volume of crude oil and petroleum products supplied fell to 19.95 million bpd in March, the lowest level since March 2024. In China, crude oil imports declined by 2 per cent in 2024—the first drop in two decades—and early 2025 data suggests continued weakness. Together, the US and China account for over 35 per cent of global crude oil demand, making these trends particularly significant. Macroeconomic indicators are also weighing on the market. The OECD, recently, cut its global GDP growth forecast for 2025 to 2.9 per cent from 3.1 per cent. In China, the May Caixin Manufacturing PMI fell sharply to 48.3, marking the steepest contraction in more than two and a half years. In the US, the ISM Manufacturing Index dropped to 48.5, while imports hit a 16-year low and exports fell to a five-year low, possibly due to retaliatory tariffs. Additionally, rising US Treasury yields have pushed long-term mortgage rates close to 7 per centm putting pressure on the housing market. Oil prices and trading strategy for crude Looking ahead, the upside for crude prices appears limited. The recent rally has been driven more by geopolitical risks than by fundamental demand. With global supply already in surplus and economic indicators pointing to a slowdown, prices are unlikely to sustain higher levels. WTI faces key resistance between $65 and $67. While short-term prices may test the $65 mark again, the long-term outlook remains bearish and we expect WTI to average around $57-$58 by end of 2025 due to expected supply surpluses and weakening demand.
The National
06-04-2025
- Business
- The National
Trump tariffs and slumping oil drag Middle East stocks to lowest level since 2020
Stock markets in the Middle East suffered their worst rout in five years, dragged lower by slumping oil prices and investor concerns that the new "universal" tariffs imposed by the administration of US President Donald Trump could disrupt global trade and stunt economic growth. In Saudi Arabia, the Arab world's largest economy, the benchmark Tadawul index slid by as much as 6.1 per cent on Sunday, its worst showing since 2020. It managed to regain some lost ground and was down 5 per cent at 1.10pm, UAE time. Stocks slumped across sectors, more noticeably in energy as well as the real estate, professional services and consumer-related services sectors. Shares in Saudi Aramco, the world's biggest oil-exporting company, were down 4.75 per cent. Oil prices had plunged to their lowest levels in more than three years on Friday, as China hit back against Mr Trump's tariffs with its additional levies on US goods. Opec+'s surprise decision to boost oil supply added to the heavy selling. Bourses in Kuwait and Qatar also dropped by more than 5.5 per cent during trading. The Abu Dhabi Securities Exchange and the Dubai Financial Market in the UAE are closed on Sundays. They shed 0.76 per cent and 1.51 per cent, respectively, at the end of trading on Friday. The US imposed a sweeping "universal baseline tariff" of 10 per cent through an executive order on what Mr Trump called 'liberation day' on Wednesday. The tariff went into effect on Saturday. The six-nation economic bloc of the GCC – Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE – along with Mena nations Egypt, Iran, Lebanon, Morocco and Yemen, all received the minimum 10 per cent tariff. Syria was the hardest hit at 41 per cent, followed by Iraq (39 per cent), Libya (31 per cent), Algeria (30 per cent), Tunisia (28 per cent) and Jordan (20 per cent). More to follow...
The National
04-04-2025
- Business
- The National
Oil on track for worst weekly loss in months on Trump tariffs and Opec+ supply decision
Oil prices extended their losses on Friday and were on track to record their worst weekly decline in months as markets feared the impact of US tariffs on the global economy and Opec+'s surprise decision to boost oil supply. Brent, the benchmark for two thirds of the world's oil, was down 0.94 per cent at $69.48 a barrel at 8.40am UAE time. West Texas Intermediate, the gauge that tracks US crude, was 0.99 per cent lower at $66.29 a barrel. Oil experienced its worst rout since 2022, on Thursday, with Brent settling 6.42 per cent lower at $70.14 a barrel and WTI closing down 6.6 per cent at $66.95 a barrel. On Wednesday, US President Donald Trump announced sweeping tariff measures on America's trading partners, prompting world leaders to consider retaliatory steps and raising the risk of trade wars that could hinder global economic growth. The minimum 10 per cent tariffs on all imports were established through an executive order, with Mr Trump saying the action will be imposed on 'friend and foe alike' because, 'in many cases, the friend is worse than the foe in terms of trade'. 'Oil and gas imports to the US have been exempted from the new round of tariffs. That said, global energy consumption is likely to take a hit if the global economy slips into a recession,' BMI, a Fitch Solutions company, said in a research note on Thursday. 'For oil, this would be exacerbated by supply additions from Opec+ and non-Opec producers that are forecast for 2025.' Asian markets extend losses Asian stocks extended losses on Friday, falling to the lowest level in two months, as fears of a global recession deepened after Mr Trump announced sweeping trade tariffs. Japan's Nikkei 225 fell more than 2.4 per cent in early trading, leading regional declines, with broader markets across Australia and South Korea also giving ground. Stock markets in China, Hong Kong, Indonesia and Taiwan were closed on Friday due to respective public holidays. The Wall Street on Thursday suffered its steepest decline since 2020 the US President's sweeping tariffs spooked investors of a global trade war and a weakening American economy. The Dow Jones Industrial Average tumbled 1,679 points – or 3.98 per cent – when trading closed. The S&P 500 and Nasdaq Composite fell 4.8 and 6 per cent, respectively, in what was their worst performance since the onset of the Covid-19 pandemic. "Yesterday saw the worst sell-off since the pandemic. Equity markets gave a strong reaction to Trump's tariff nonsense ... Apple, Amazon, Nvidia, Microsoft, Tesla lost tens and for some hundreds of billions in market cap. Companies that have complex worldwide supply chains like Gap, H&M and Dell saw heavy losses, as well," said Ipek Ozkardeskaya, senior analyst at Swissquote Bank. "The global economy has now entered a dark tunnel. No one knows what's next."
Hi Dubai
27-02-2025
- Business
- Hi Dubai
UAE: Will Petrol Prices Drop in March 2025 Following Global Oil Price Decline?
Petrol prices in the UAE are expected to decrease in March 2025, following a decline in global oil prices observed in February. Brent crude, a major global benchmark, averaged $75 per barrel in February, down from $77.55 the previous month. This price drop is attributed to several factors, including a decision by the Organisation of the Petroleum Exporting Countries (Opec+) to gradually increase oil production starting April 1, 2025. In the UAE, fuel prices have already been set for March 2025, with Super 98 priced at Dh2.74 per litre, Special 95 at Dh2.63, and E-Plus at Dh2.55. The fluctuation of US crude oil inventories has added further pressure to the energy market, with increased reserves reinforcing concerns of a short-term oversupply. This development has prompted traders to scale back their positions in the futures market, contributing to a decline in West Texas Intermediate (WTI) crude prices. Market analysts suggest that the ongoing volatility is largely influenced by the strength of the US dollar, which makes oil more expensive for international buyers, thereby affecting demand. Additionally, macroeconomic factors such as US Federal Reserve policies and interest rate expectations are playing a role in the decline of oil prices. Antonio Di Giacomo, senior market analyst at noted that the drop in crude prices reflects investor uncertainty regarding Opec+'s planned increase in production. 'Although this decision was anticipated, its impact has been significant, exacerbated by a stronger dollar and rising US inventories,' Di Giacomo said. Vijay Valecha, chief investment officer at Century Financial, highlighted that hedge funds have become less optimistic about oil's prospects, trimming their bullish bets. Valecha also pointed to concerns over potential US tariffs and geopolitical tensions, particularly related to the war in Ukraine, which could further disrupt market dynamics. As the global energy market continues to adjust, investors and industry stakeholders will closely monitor Opec+'s actions and key economic indicators to gauge the future direction of crude oil prices. News Source: Khaleej Times
Zawya
12-02-2025
- Business
- Zawya
Moderate growth of 3.4% seen for MENA
The Middle East and North Africa (MENA) region is set to experience moderate economic growth in 2025, with GDP projected to expand by 3.4%, according to the latest FocusEconomics Consensus Forecast. While this marks an improvement from 2024 and surpasses the region's 2014–2023 average of 2.5%, the forecast has been slightly trimmed due to Opec+'s decision to delay oil output hikes. The economic expansion is expected to be driven by a gradual recovery in oil production and robust non-oil sector growth, particularly in the Gulf countries. Inflation across the region is forecasted to remain uneven but less volatile than in previous years, stabilising as currency fluctuations in Egypt and Lebanon ease. In nations with US dollar pegs, inflation is expected to stay in low single digits. However, risks remain, including potential currency devaluations, supply chain disruptions, geopolitical tensions, and food price spikes. The average inflation rate for MENA is projected at 5.9% in 2025, holding steady from the previous month's estimate, with a decline to 5.0% expected in 2026. Monetary policy in MENA is largely influenced by the US Federal Reserve, as most central banks in the region maintain dollar pegs. Interest rates remained steady in January, in line with US monetary policy. However, as inflation and US interest rates ease, most MENA central banks are expected to implement rate cuts. The region's aggregate policy rate is anticipated to end 2025 at 5.20% before further declining to 4.49% in 2026. Currency movements in MENA have shown an overall strengthening trend against the US dollar in the past month, largely driven by the US administration's decision to delay tariffs on Canada and Mexico. By the end of 2025, Algeria, Egypt, and Tunisia's currencies are expected to depreciate, while Morocco's currency is projected to appreciate, and Israel's currency is likely to remain stable. On average, regional currencies are forecast to decline by 0.4% against the US dollar in 2025 and 0.6% in 2026. A Look Back at 2024 After two turbulent years, the MENA economy showed signs of aligning with its long-term trend by the end of 2024. Economic challenges in 2023 and much of 2024 stemmed from balance of payments crises triggered by high import prices and production cuts agreed upon by Opec+. However, import costs have since declined, and oil production levels are now benefiting from a more favorable comparison base. In the third quarter of 2024, GDP growth accelerated in key economies including Abu Dhabi, Egypt, Jordan, Qatar, Morocco, Saudi Arabia, and Tunisia, marking the strongest expansion in several quarters. By the fourth quarter, Saudi Arabia—the region's economic powerhouse, accounting for a quarter of MENA's GDP—experienced its fastest annual economic growth in two years. On the geopolitical front, the ceasefire agreement reached between Israel and Hamas in January 2024 provided a boost to investor confidence and stability in the region, which could support further economic recovery in 2025. With a combination of recovering oil production, resilient non-oil sector growth, and easing inflation, MENA's economic outlook for 2025 remains cautiously optimistic, despite lingering uncertainties surrounding global energy markets and geopolitical risks. - TradeArabia News Service Copyright 2024 Al Hilal Publishing and Marketing Group Provided by SyndiGate Media Inc. (
