Oil Prices Drop on Surging U.S. Stockpiles and OPEC+ Policy Uncertainty
Oil Prices Decline Amid Stockpile Increase and OPEC+ Policy Indecision
Oil prices fell for the second consecutive day, decreasing by over 1% on Wednesday due to surging U.S. stockpiles and indications that the OPEC+ producer group is unlikely to alter its output policy at an upcoming technical meeting.
Price Movement and Market Analysis
Oil futures for May saw a decline of 1.12%, reaching $85.28 a barrel by 0929 GMT, while the June contract dropped by 1.07% to $84.71. The more active June contract will take over when the May contract expires on Thursday. Additionally, U.S. West Texas Intermediate (WTI) crude futures for May delivery fell by 1.14% to $80.69.
Inventories and OPEC+ Outlook
The recent increase in oil inventories and expectations of OPEC+ maintaining the status quo next week have led to a downward trend in oil prices. The Organization of the Petroleum Exporting Countries (OPEC) and its allies are unlikely to make any changes to oil output policies until a full ministerial gathering in June, as reported by three OPEC+ sources. This decision comes after OPEC+ extended output cuts until the end of June.
Market Impact and Economic Forecast
Traders are closely monitoring OPEC members for any shifts in production quotas, while leading German economic institutes have revised their growth forecast downwards to 0.1% for 2024, signaling challenges for Europe’s economy.
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