Oil Prices Decline Amid Supply Concerns, Geopolitical Developments
Global oil prices experienced a downward trend on Monday as markets responded to potential supply increases linked to diplomatic discussions between the United States and Iran regarding nuclear agreements.
Brent crude, the international pricing benchmark, decreased by approximately 0.53% to $64.18 per barrel, representing a decline from Friday’s closing price of $65.41. Meanwhile, West Texas Intermediate (WTI), the primary U.S. crude indicator, traded at $61.64 per barrel during the same timeframe.
Market volatility stems from multiple factors, including uncertainty over Federal Reserve monetary policy decisions, ongoing diplomatic efforts between Russia and Ukraine, and emerging data pointing to expanding global petroleum supplies.
Recent diplomatic initiatives between Washington and Tehran have intensified market concerns about potential oversupply scenarios. While U.S.-China trade relations have shown signs of stabilisation, investors continue to monitor the implications of current American trade policies on global commodity flows.
Supply-side pressures have been reinforced by projections from the International Energy Agency (IEA), which anticipates substantial increases in worldwide oil production throughout the current year.
The IEA’s most recent market analysis revealed that global petroleum output rose by roughly 160,000 barrels per day in April, bringing total production to 104.46 million barrels per day compared to the preceding month.
Domestic U.S. drilling activity showed mixed signals, with Baker Hughes reporting a single-rig decline for the week ending May 16, bringing the total active oil rig count to 473. This weekly data, considered a reliable short-term production indicator, reflects a year-over-year decrease of 24 rigs compared to the same period last year.
