Crude oil prices fell 19% in a month, increasing pressure on agricultural prices
Crude oil prices have responded to the “achievements” of Trump’s 100 days in office in shaking up the US and global economy with another drop. The lack of progress in negotiations with China, a 0.3% decline in US GDP in the first quarter (compared to a 3% increase last year), and a drop in Chinese manufacturing activity to a 16-month low indicate a slowdown in the world’s largest economies, which will lead to a reduction in demand for oil and energy.
In addition, Saudi Arabia recently said it could weather a prolonged period of low prices by increasing oil production. Several other OPEC+ members are proposing a second consecutive month of output increases in June, which will be discussed at a meeting on May 5. The production increase would lower oil prices and punish OPEC+ members that produce more than their quotas.
June Brent crude futures fell by 6% to $63.1/barrel (-19% for the month) since Monday, and US WTI futures fell by 8.4% to $58.1/barrel (-22% for the month).
Amid falling oil prices, palm oil futures fell 3.7% and soybean futures fell 3% this week, while corn futures fell only 1.9% as markets for agricultural products used in biodiesel production need more time and supply and demand data to determine price trends.
The successful completion of soybean and corn planting in the US, as well as the USDA’s May report, may trigger a change in agricultural commodity prices.
U.S. and Iranian officials reported progress in talks on Iran’s nuclear program and agreed to meet again in Europe this week. The nuclear deal with Iran would allow the U.S. to lift restrictions on Iranian oil exports, which would increase global supply and further lower crude prices.
Got additional questions?
We will be happy to assist!
Write to us
Our manager will contact you soon