FX.co ★ Oil Posts Sharpest Monthly Drop Since 2021

WTI crude oil futures experienced a significant decline of 3.7%, closing at $58.20 per barrel on Wednesday. This marked the steepest monthly drop since late 2021, with an 18% decrease due to growing apprehensions about a global surplus in supply and diminishing demand. Prices were additionally pressured by Saudi Arabia's indication of increased production to regain market share, and reports that OPEC+ may consider further output hikes at their upcoming May 5 meeting, intensifying fears of a potential price war. The demand outlook was further obscured by ongoing trade tensions between the US and China, coupled with a contraction in the US economy during the first quarter and a significant decrease in consumer confidence. Despite the prevailing negative sentiment, the impact was somewhat mitigated by an unexpected reduction in US crude inventories, which fell by 2.7 million barrels last week.