FX.co ★ Oil Extends Drop on Potential OPEC Hike

WTI crude oil futures continued their downward trajectory, dropping below $62.6 per barrel on Wednesday—marking a 9% decline since the start of April. This drop stemmed from the potential continuation of increased supply by OPEC+ in the forthcoming months. In a notable move, Kazakhstan, a key OPEC+ member, announced it would prioritize its national interests over the production limits set by the organization, indicating an intention to boost its output. This decision has heightened tensions within OPEC+ as various countries struggle to adhere to their production quotas. In light of these dynamics, certain members have proposed an additional output increase in June, building on the unanticipated plan to elevate production at three times the anticipated rate in May. Concurrently, the United States has introduced new restrictions targeting an influential Iranian entity involved in LPG and crude shipping, sparking speculation that these sanctions could impact Iranian exports. On the demand side, global consumption forecasts remain uncertain. This is due to the conflicting pressures of the ongoing trade dispute between the U.S. and China and hints from the White House suggesting a possible de-escalation of tariffs.