Oil prices fell on Friday as the Organization of the Petroleum Exporting Countries Plus and Allies’ (OPEC+) meeting on Sunday sparked concerns.
The US West Texas Intermediate (WTI) July crude futures declined 1.18% to $76.99 per barrel on May 31. Market analysts anticipate a 0.19% rebound to $77.14 a barrel in the following trading day.
Similarly, Brent oil futures for June delivery slipped 0.29% to $81.62 a barrel, extending a three-day losing streak. Industry watchers expect the crash to continue with a 0.22% plunge to $80.95 in the coming market session.
WTI Petroleum lost 6.00% in May, marking the US benchmark’s worst month since November but still gaining 7.40% year-to-date (YTD). Its London counterpart also retreated 7.10%, marking its poorest performance of the year, although it added 5.90% YTD.
According to commodity specialists, gasoline consumption in the US averaged 1.40% year-over-year (YoY) in the runup to Memorial Day. In addition, a warmer-than-average winter and hints that interest rates will remain elevated have reduced demand.
Meanwhile, the Energy Information Administration (EIA) crude inventories shed 4.16 million barrels in the week ending May 24. The reading was deeper than the forecast draw of 1.60 million barrels and reversed the 1.83-million-barrel build the week before.
American Petroleum Institute (API) oil stock decreased by 6.49 million barrels during the same period. The draw was more than triple the projected 1.90-million-barrel drop, erasing the 2.48-million-barrel increase in the week ending May 17.
OPEC+ Extends Deep Oil Production Cuts Into 2025
On Sunday, OPEC+ announced that it will continue reducing its annual oil yield by 3.66 million barrels per day (bpd) until 2025. Likewise, the group will prolong the additional cuts of 2.20 million bpd by three months until the end of September.
It then plans to wind down the 2.20 million bpd reductions over 12 months from October 2024 to September 2025. However, OPEC+ did not reveal how low the phase-out period for the 3.66 million bpd output decrease will be.
Saudi Energy Minister Prince Abdulaziz bin Salman said the agency is waiting for the interest rates in major economies to ease before finalizing their exit strategy for oil production cuts.
