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Oil Prices Fall, Post Biggest Monthly Drop Since 2021
Thursday, 1 May 2025 03:14 WIB | OIL |Minyak WTIbrent oil

Oil prices fell on Wednesday, posting their biggest monthly drop in nearly 3-1/2 years after Saudi Arabia signaled moves to produce more and expand its market share, while a global trade war eroded the outlook for fuel demand.

Brent crude fell $1.13, or 1.76%, to settle at $63.12 a barrel. U.S. West Texas Intermediate crude fell $2.21, or 3.66%, to settle at $58.21, its lowest close since March 2021.

Brent fell 15% for the month and WTI slid 18%, their biggest monthly percentage declines since November 2021.

Both benchmarks slumped after Saudi Arabia, one of the world's biggest oil producers, signaled it was unwilling to prop up the oil market with further supply cuts and could handle a prolonged period of low prices. "This raises concerns that we may be headed for another production war," said Phil Flynn, senior analyst at Price Futures Group. "Are the Saudis trying to send a message that they're going to get their market share back? We'll have to wait and see."

Earlier this month, Saudi Arabia pushed for a larger-than-planned increase in OPEC+ output in May.

Some OPEC+ members are set to suggest a second straight month of output increases in June, sources told Reuters last week. The group is due to meet on May 5 to discuss production plans.

"The trade war is directly reducing oil demand and hurting consumer travel. Combined with the lifting of OPEC's production cuts, the risk of a supply glut is increasing," said Pavel Molchanov, investment strategy analyst at Raymond James.

U.S. President Donald Trump announced tariffs on all U.S. imports on April 2 and China responded with its own levies, sparking a trade war between the world's top two oil consuming nations. Concerns about a weakening global economy continue to weigh on oil prices.

Data on Wednesday showed the U.S. economy contracted in the first quarter, weighed down by a flood of imported goods by businesses seeking to avoid higher costs.

Trump's tariffs have made it likely that the global economy will slide into recession this year, according to a Reuters poll.

Meanwhile, U.S. consumer confidence slumped to its lowest level in nearly five years in April as concerns over tariffs grew, data showed on Tuesday.

U.S. crude stockpiles unexpectedly fell last week on higher export and refinery demand, capping some of the price decline.

Crude inventories fell 2.7 million barrels to 440.4 million barrels in the week to April 25, the Energy Information Administration said on Wednesday, compared with analysts' expectations in a Reuters poll for a 429,000-barrel increase. (Newsmaker23)

Source: Reuters

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