U.S. crude oil prices fall after OPEC+ agrees to surge production in June

[BumRushDaShow]

Source: NBC News/CNBC

May 5, 2025, 10:49 AM EDT / Source: CNBC


U.S. crude oil futures fell more than 2% on Monday, after OPEC+ agreed to surge production for a second month.U.S. crude was down $1.55, or 2.66%, at $56.74 a barrel by 10:26 a.m. ET. Global benchmark Brent fell $1.45, or 2.37%, to $59.84 per barrel. Oil prices have fallen about 20% this year.

The eight producers in the group, led by Saudi Arabia, agreed on Saturday to increase output by another 411,000 barrels per day in June. The decision comes a month after OPEC+ surprised the market by agreeing to surge production in May by the same amount.

The June production hike is nearly triple the 140,000 bpd that Goldman Sachs had originally forecast. OPEC+ is bringing more than 800,000 bpd of additional supply to the market over the course of two months.

Oil prices in April posted the biggest monthly loss since 2021, as U.S. President Donald Trump’s tariffs have raised fears of a recession that will slow demand at the same time that OPEC+ is quickly increasing supply.

Read more: https://www.nbcnews.com/business/energy/us-crude-oil-prices-fall-opec-agrees-surge-production-june-rcna204844

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It had been trading around $57/bbl before the close (but dropped as low as $55/bbl). This will stress some frackers with "breakeven" amounts in that range or higher.

[dutch777]

1. Lots of US oil businesses start losing money below $60 a barrel. Will be business and employment impacts. Surprised...

Donnie hasn't been scolding the Saudi's and others in OPEC+ about this. Of course, if he or the Israelis go after Iran militarily over their supplying the Houthis and/or their nuclear program, and the Iranians attack shipping in the Gulf or Gulf oil production facilities in other countries, that will spike prices. What the world economy needs is more rocking and jerking about.

[BumRushDaShow]

2. Russia will also lose with the lower prices

with its "ghost ships" running around selling oil outside of the various sanctions.

[dutch777]

3. That's true, it discounts off the prevailing benchmark and will lose Putin rubles. Thought we were going to...

...start interdicting the ghost fleet? Probably a Biden thing now long tossed to the side along with anything else that makes sense.

[BumRushDaShow]

5. I saw a recent article about the ghost fleet

US bill creates fund to enforce oil sanctions on Russia's ghost fleet


April 9, 2025 10:56 AM EDT Updated a month ago


WASHINGTON, April 9 (Reuters) - Legislation from two U.S. senators from both parties introduced on Wednesday establishes a fund to enforce sanctions on the so-called ghost fleet of tankers Russia relies on to carry oil to avoid Western sanctions over its war on Ukraine.

The bill from Senators Joni Ernst, a Republican, and Richard Blumenthal, a Democrat, creates a fund to enforce sanctions on vessels, which sometimes also carry crude exports from Iran, a trade President Donald Trump says he wants to bring down to zero to prevent it from getting a nuclear weapon.

WHY IT'S IMPORTANT

Russia and Iran have used the shadow fleet to avoid sanctions and send oil to big customers like China and India. If Russian oil is under a $60 per barrel price cap set by Western economies, that trade is not under sanctions, provided the tankers have not been designated.

The bill also establishes an export enforcement coordination center operated by the secretary of Homeland Security.

(snip)

Don't know if this is going anywhere though. Might be something that moves "on the whim" of the WH.

Russia has already been selling at a big discount so any demands from buyers that go lower is going to impact them.

[dutch777]

9. Really would not be hard to ID and track the tankers when they leave port. They turn their transponders off but...

...Navy satellites could easily track if we wanted to interdict them. As you say, probably an issue of WH whim. If they wanted to push Putin to actually end the Ukraine war, cutting off his one cash garnering export, other than maybe diamonds, this would be a way. Majority of RU oil comes out of the Baltic and Black Sea ports although there are Pacific ports as well but much lower output there. Turkey could catch them at the Bosporus Straits and Sweden and Norway or others could get them on the way out of the Baltic.

[Clouds Passing]

4. The fatalist techbros need cheap energy for their AI and end times bunkers

[mdbl]

6. I hope we can drink gas

because everything else is getting too expensive.

[BumRushDaShow]

7. I expect some of the petroleum refinery "cracking" process

could collect and save a fraction that is ethanol.

[patphil]

8. Oil prices have fallen about 20% this year.

I haven't seen much change in the price of gasoline over the past several months. It's maybe gone down about 10 cents a gallon where I live; from about $3.20 to about $3.10.
I would expect to see a much more substantial drop in the summer if OPEC releases a glut of crude as they are planning.
Usually the price of gas goes up in the summer. Will it be different this year?