A turbulent week for global energy markets saw oil prices slide amid concerns over OPEC+’s unpredictability, escalating U.S.-China tensions, and rising production levels from countries like Saudi Arabia and Russia.
The double whammy of OPEC+’s uncertain future and Donald Trump’s heated rhetoric over China has put renewed pressure on oil prices. The ICE Brent is currently trading slightly below $64 per barrel, while WTI is hovering around the $60 per barrel threshold. If OPEC+ surprises the market with a bigger-than-expected output increase in July, the downward trend could continue into early June.
Meanwhile, Saudi Aramco has tapped into the financial markets to meet its investment plans, issuing a $5 billion bond sale. The company’s gearing ratio remains lower than most industry peers. Oil sands producers in Canada are bracing for wildfires, which have already affected production in Alberta.
Libya is on high alert as its Benghazi government threatens to announce another period of force majeure due to repeated assaults on the National Oil Corporation. Iran has hinted at a potential nuclear deal with the US if frozen Iranian funds worth $6 billion are released and the country’s right to civilian nuclear development is recognized.
Chevron has terminated its production and service contracts in Venezuela after the Trump administration’s wind-down period expired, while Syria has signed a major power deal with Qatar worth $7 billion. TotalEnergies has exited Nigeria’s Bonga field, selling 12.5% of its stake to Shell for $510 million. Kazakhstan has denied claims it can force Western oil majors to cut production, despite being OPEC+’s most notorious overproducer.
Glencore is preparing for a surprise merger with Rio Tinto, while China has softened its stance on rare earth export controls. The US Commerce Department has introduced ethane export controls, and traders are vying for the prized Italian refiner IP.
As global energy markets navigate these uncertainties, it’s clear that OPEC+’s future production levels will play a significant role in shaping the market outlook.
Source: https://oilprice.com/Energy/Energy-General/Brent-Slides-Below-64-as-Trump-and-OPEC-Rattle-Crude-Markets.html