AM:11:25:04/05/2025
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Crude oil prices have fallen nearly 20% this year, weighed down by global economic uncertainty, weaker-than-expected demand from China, and strong supply from non-OPEC+ countries, particularly the U.S.
OPEC+ recently confirmed an increase of 411,000 barrels per day for June, signaling a shift in strategy away from output restraint. The decision comes despite well-stocked markets and mixed demand signals. Brent crude is now hovering around $61 a barrel, while West Texas Intermediate remains below $60.
The decision to boost output has raised concerns that global inventories may rise, potentially pushing prices further down. Analysts estimate up to 200 million barrels could be added to storage in the coming months, possibly pushing prices toward the low $50s.
Geopolitical and Economic Impact
While lower oil prices could benefit consumers, oil-dependent economies like Saudi Arabia, where the break-even price is above $90 per barrel, may struggle with reduced revenues. Meanwhile, U.S. shale producers are adjusting to the softer price environment, with companies like Chevron reducing spending.
OPEC+ will meet again on June 1 to set production levels for July, with markets likely to remain responsive to supply and macroeconomic trends.