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Oil prices post biggest monthly drop since November 2021
Oil prices fell during trading on Wednesday, April 30, recording their largest monthly decline in nearly three and a half years, following signs that Saudi Arabia was moving to increase production and gain a larger market share, while the global trade war led to expectations of a decline in fuel demand.
Brent crude futures fell $1.13, or 1.76%, to settle at $63.12 a barrel.
US crude futures fell $2.21, or 3.66%, to settle at $58.21 a barrel, their lowest settlement level since March 2021, according to Reuters.
Brent crude fell 15.55% and US crude fell 18.56% in April, the largest percentage decline since November 2021.
Both benchmarks fell after Reuters quoted five sources familiar with the matter as saying that Saudi officials had told allies and oil industry experts that Riyadh was unwilling to support the oil market with new production cuts and could tolerate lower prices for a prolonged period.
Phil Flynn, senior analyst at Price Futures Group, said: "This raises concerns that we are heading towards a new production war. Are the Saudis trying to send a message that they will regain market share? We'll have to wait and see."
This comes after Riyadh urged a larger-than-planned increase in OPEC+ production in May.
Sources told Reuters last week that proposals would be made at the alliance's next meeting, on May 5, by some members to increase the agreed-upon production increases in June.
Concerns about the Global Economy and Demand
At the same time, concerns about the weakness of the global economy and, consequently, oil demand continued to pressure crude prices after the outbreak of a trade war between the United States and China following US President Donald Trump's announcement of tariffs on all foreign imports on April 2, and Beijing's retaliatory tariffs.
Data released on Wednesday revealed that the US economy contracted in the first quarter of 2025, driven by increased imports by some companies to avoid higher costs when the tariffs were imposed.
According to a Reuters poll, US tariffs have raised the possibility of the global economy entering a recession this year.
