Oil Prices Decline as Economic Fears Outweigh Supply Cut Expectations

Oil prices fell on Monday, as concerns regarding fuel demand in the United States and China, the world's largest consumers, outweighed optimism regarding supply cuts from OPEC+ and the U.S. resuming purchases for its reserves. By 01:30 GMT, Brent crude futures were down 43 cents, or 0.6%, to $73.74 per barrel, while West Texas Intermediate (WTI) crude futures dropped 37 cents, or 0.5%, to $69.67 per barrel. Last week, both crude benchmarks declined for the fourth consecutive week, marking the longest streak of weekly declines since September 2022, due to fears of the U.S. entering a recession due to a "strong likelihood" of a historic debt default in the first two weeks of June. Investors sought safe havens like the U.S. dollar, which strengthened the American currency and made dollar-denominated commodities more expensive for holders of other currencies. In April, the OPEC+ group, which includes the Organization of the Petroleum Exporting Countries (OPEC) and oil producers like Russia, announced additional production cuts of about 1.16 million barrels per day, bringing the total production cut to 3.66 million barrels per day. However, Iraqi Oil Minister Hayyan Abdel-Ghani stated, "Iraq is not expected to participate in further oil production cuts under OPEC+ in the group's upcoming meeting in June."