Oil prices steadied in early Asian trading on Thursday after a big drop the day before. This drop was caused by worries that Saudi Arabia might increase oil production and data showing that the U.S. economy shrank. Brent crude futures went up by 7 cents, or 0.1%, reaching $61.13 per barrel. U.S. West Texas Intermediate (WTI) crude futures rose by 1 cent, or 0.02%, to $58.22. WTI had closed at its lowest level since March 2021 the day before.
Sugandha Sachdeva, an expert at SS WealthStreet in New Delhi, said that for now, oil prices are likely to keep going down. “Demand is weakening, and there are fears of more oil being supplied, which could push prices down further,” she explained. Sachdeva believes that Brent crude might drop to $55 per barrel soon.
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Saudi Arabia has told oil experts and other countries that it is not planning to cut oil supply to support prices. Instead, it says it can handle a long period of lower oil prices. OPEC+ countries, including Saudi Arabia, will meet on May 5 to decide whether to increase oil output in June for the second month in a row. Any unexpected changes in production could cause big price swings.
Meanwhile, in the U.S., the world’s largest oil consumer, the economy shrank in the first quarter of the year for the first time in three years. This was mainly due to a surge in imports as businesses tried to avoid higher costs from tariffs, highlighting the negative impact of trade policies.
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A recent survey showed that oil prices could face more pressure due to global trade issues and OPEC+ decisions. Analysts lowered their global oil demand growth forecast for 2025, predicting it will rise by only 640,000 barrels per day, down from the previous estimate of 800,000 barrels per day. A separate survey of economists expects Brent crude prices to average $68.98 per barrel in 2025, down from $72.94 in March.
In the U.S., oil stockpiles dropped by 2.7 million barrels last week, mainly due to higher demand for exports and refineries. This was a bigger drop than expected, as analysts had predicted a small increase in stockpiles.
