News

Crude oil posted its worst month in nearly 3-1/2 years as Saudi Arabia, the largest exporter in the OPEC+ bloc, hinted at increasing production and handling lower prices for a longer period as weak global demand continues to cloud the demand outlook.

Oil prices fell 16 percent in April as Reuters reported that Saudi Arabia hinted being unwilling to support the oil market with more supply cuts. This may imply the OPEC+ bloc leader could consider ramping up oil production to expand market share, which would be a major change in its policy, which for past five years has been trying to balance the market through its output cuts.

Already, as many as eight OPEC+ nations have agreed to advance phasing out of output cuts by ramping up output in May, which has partly triggered the sharp cooloff in oil prices to below $60 per barrel, a four-year low in April. The cartel is slated to meet on May 5 to consider output hike, and Reuters reported citing people familiar with the development that several OPEC+ members may back a production ramp up in June.

"It raises concern that we could be headed towards another production war," Reuters quoted Phil Flynn, senior analyst with Price Futures Group.

The sharp slump in international oil prices would favour of India, as it may ease inflationary pressures and reducing the country's energy import bill, experts have told Moneycontrol. "Given our large import bill, a drop in oil prices reduces the current account deficit by 30 bps for every $10 decrease in oil prices," Sakshi Gupta, Principal Economist, HDFC Bank said.

Economic uncertainty due to global trade tariffs and fears of a US recession have been weighing on international oil prices for some time. Already, US economic data has showed that the American economy unexpectedly contracted during the first quarter, a first since 2022, as business activity was disrupted due to tariff-related uncertainties, prompting renewed fears of a recession in the US economy. The US consumer confidence is down to its lowest in nearly five years in April, roiled by tariff-related concerns.

An anticipated decision by OPEC+ to increase production in May is further putting pressure on crude oil prices. Experts see oil prices staying below $75 per barrel in the medium term as trade-related uncertainties and oversupply in the market could continue to weigh.

Goldman Sachs recently said that Brent prices have an outside chance of falling below $40 a barrel under 'extreme' outcomes, due to the trade war and rising global oil supplies.

Discover the latest Business News, Budget 2025 News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!

${res.must_watch_article[0].headline}

Stock Market Holiday Jammu Kashmir News Live Waves Summit 2025 Live Heatwave in India Q4 Results 2025 Live Hit 3 Review JKBOSE 10th Result 2025 Kolkata News Retro Movie Review IPL Points Table 2025

Business Markets Stocks India News City News Economy Mutual Funds Personal Finance IPO News Startups

Home Currencies Commodities Pre-Market IPO Global Market Bonds

Home Loans up to 50 Lakhs Credit Cards Lifetime Free Finance TrackerNew Fixed Deposits Fixed Deposit Comparison Fixed Income

Home MC 30 Top Ranked Funds ETFs Mutual Fund Screener

Income Tax Calculator EMI Calculator Retirement Planning Gratuity Calculator

Stock Markets

News18 Firstpost CNBC TV18 News18 Hindi Cricketnext Overdrive Topper Learning

About Us Contact Us Advisory Alert Advertise with Us SupportDisclaimer Privacy Policy Cookie Policy Terms & Conditions Financial Terms (Glossary) Sitemap Investors

You are already a Moneycontrol Pro user.