Weekly oil prices fall: the market expects a truce
25 April 08:35
Oil prices rose slightly on Friday, but are expected to fall by the end of the week, "Komersant Ukrainian" reports citing Reuters.
The factors behind this dynamics are a potential increase in production by OPEC countries and a possible truce in the Russian-Ukrainian war, which could lead to an increase in supply in the market. At the same time, conflicting signals about the US tariff policy limit demand prospects.
Brent crude oil futures rose 5 cents to $66.60 per barrel as of 02:01 Kyiv time, but are forecast to fall 2% over the week.
U.S. West Texas Intermediate (WTI) rose by 6 cents to $62.85 per barrel, but is expected to decline by 2.9% over the week.
“Peaceful” negotiations
The United States and Russia are moving in the right direction to end the war in Ukraine, although some specific elements of the agreement still need to be agreed upon. This was stated by Russian Foreign Minister Sergey Lavrov in an interview with CBS News.
The end of Russian aggression against Ukraine and the easing of sanctions may allow Russia to increase oil supplies to world markets. Russia, a member of the OPEC group, which includes the Organization of the Petroleum Exporting Countries, is one of the world’s largest oil producers along with the United States and Saudi Arabia.
On Thursday, Trump sharply criticized Russian President Vladimir Putin after Russia fired missiles and drones at Kyiv overnight, saying: “Vladimir, STOP!”
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OPEC
Also potentially boosting global supply, several OPEC members proposed to accelerate oil production increases for the second consecutive month in June.
Iranian Foreign Minister Abbas Araghchi said on Thursday that he was ready to travel to Europe for talks on Tehran’s nuclear program. Successful negotiations with Europe and the United States will likely lead to the lifting of sanctions on Iranian oil exports. Iran is the third largest oil producer in OPEC after Saudi Arabia and Iraq.
Trade war
Nevertheless, the demand outlook remains uncertain amid a trade war between China and the United States, the world’s two largest oil consumers.
Businesses are raising prices and revising financial forecasts due to rising costs caused by the trade war, which has also disrupted global supply chains and raised fears of a global economic downturn. This may negatively affect oil demand, and thus also work to lower prices.
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