16 hours Ago By Alex Kimani
Oil markets have kicked off the new week on the back foot with the oil price selloff deepening amid a raft of bearish catalysts. Brent for May delivery fell 1.38% to trade at $69.
39 per barrel at 1.44 pm ET on Monday, while WTI crude for April delivery declined 1.37% to change hands at $66.
12 per barrel. The oil price decline comes as a reversal after crude oil futures rose sharply on Friday but still finished with another week of losses thanks to OPEC's decision to go ahead with production increases starting in April, uncertainty over U.S.
tariffs, and a bearish build in U.S. crude stocks.
Last week, a statement posted on OPEC's revealed that Saudi Arabia, Russia, the United Arab Emirates, Iraq, Kuwait, Kazakhstan, Oman and Algeria will start unwinding a 2.2 million barrel per day cut from April. The cartel’s about 138,000 bpd in April appears intended to appease U.
S. President Donald Trump, who has repeatedly called on OPEC “to reduce the price of oil.” " ," UBS analyst Giovanni Staunovo said.
Friday's gains were triggered by remarks by Russian Deputy Prime Minister Alexander Novak that OPEC+ the production increase planned to begin next month: If there is an imbalance in the market, "we can always play in the other direction," Novak said, according to Reuters. Previously, we noted that the OPEC press release stressed that the return of oil “may be paused or reversed subject to market conditions’’. Related: Jeff Currie: The World Has Reached Peak Oil Trade On a further bullish note, the increase in oil supply due to OPEC unwinding could even be lower due to a potential offsetting effect of an acceleration in the payback of past overproduction.
Commodity analysts at Standard Chartered have reported that current market balances imply that the unwind is unlikely to produce any significant surplus, with a mild surplus expected in Q4-2025 and Q4-2026. Meanwhile, robust demand growth and a continued slowdown in U.S.
oil liquids supply will create room for the cuts to be unwound. U.S.
oil supply growth slowed significantly in 2024, with revised data showing U.S. crude oil output averaged 13.
208 mb/d, good for a mere increase of 274 kb/d y/y following the 942 kb/d increase seen in 2023. StanChart has predicted that U.S.
crude oil output will slow further to 231 kb/d in 2025 and just 66 kb/d in 2026. Meanwhile, there are growing signs that oil under sanctions is returning to the markets. China’s crude imports during the first two months of this year were down about 5% from a year earlier, thanks to U.
S. sanctions on Iran. However, Iranian oil continues being delivered to Chinese ports aboard smaller tankers.
“ ,” RBC Capital Markets analysts including Brian Leisen and Helima Croft wrote this week. “ Trump’s first sanctions against Iran targeted 3 vessels carrying Iranian crude to China. The sanctions affected one very-large crude carrier (VLCC) and two Aframaxes that the Treasury Department said helped move Iranian oil to China.
They also targeted several entities and individuals across different countries involved in the trade, on behalf of Tehran’s Armed Forces General Staff and its sanctioned front company, Sepehr Energy Jahan Nama Pars. The Trump administration imposed further sanctions on more than 30 people and vessels for selling and transporting Iranian petroleum-related products as part of the country’s"shadow fleet". The latest sanctions target tanker operators and managers in India and China; oil brokers in the United Arab Emirates (UAE) and Hong Kong and the head of Iran's National Iranian Oil Company.
Trafigura Group’s head of oil trading Ben Luckock has named U.S. foreign policy towards Iran as the biggest upside risk to crude prices in an otherwise well supplied market.
“ ” Luckock said in an interview on Bloomberg TV. “ .”.
