Oil prices are poised to experience a weekly decline due to the prospect of increased global supply. Oil prices experienced a slight increase on Friday; however, they remained poised for a weekly decline. This situation arises as a potential increase in OPEC+ output and a possible ceasefire in the Russia-Ukraine conflict could enhance supply, while simultaneously, mixed signals regarding U.S. tariffs constrain the demand outlook.
Brent crude futures increased by 5 cents to $66.60 a barrel as of 0001 GMT, indicating a projected decline of 2% for the week. U.S. West Texas Intermediate (WTI) crude increased by 6 cents to $62.85 a barrel; however, it is poised for a weekly decline of 2.9%.
In an interview with CBS News, Russian Foreign Minister Sergey Lavrov indicated that the United States and Russia are progressing towards a resolution of the conflict in Ukraine; however, certain specific components of an agreement still require consensus. A cessation of hostilities in Ukraine and a reduction in sanctions on Russia might facilitate an increase in the availability of Russian oil in global markets. Russia, a participant in the OPEC+ coalition that encompasses the Organization of Petroleum Exporting Countries, ranks among the globe’s largest oil producers alongside the U.S. and Saudi Arabia. On Thursday, Trump expressed his disapproval of Russian President Vladimir Putin following a night of missile and drone strikes on Kyiv, stating, “Vladimir, STOP!”
Additionally, contributing to the global supply dynamics, several OPEC+ members have proposed that the group expedite oil output increases for a second consecutive month in June, as reported by Reuters earlier this week.Iranian Foreign Minister Abbas Araqchi stated on Thursday his willingness to travel to Europe for discussions regarding Tehran’s nuclear program. Successful negotiations with Europe and the U.S. would likely lead to the removal of sanctions on Iranian oil exports. Iran ranks as the third-largest oil producer within OPEC, following Saudi Arabia and Iraq.
The demand outlook continues to be uncertain due to the ongoing trade war between China and the U.S., the two largest oil consumers globally. Businesses are raising prices and reducing financial guidance as a result of elevated costs arising from the trade war, which has disrupted global supply chains and raised alarms about a potential global economic slowdown that may impact oil demand.