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  • Writer's pictureRealFacts Editorial Team

Oil Prices Plummet to Three-Month Lows Ahead of Summer Driving Season Kickoff

oil rigs

In CNBC’s article “Oil prices bounce back from three-month lows, but still heading for weekly loss,” Spencer Kimball quotes Tamas Varga, an analyst at oil broker PVM, saying, “Macroeconomic developments have been failing to provide meaningful support for oil, which has its own problems to deal with.” Crude oil futures dropped to their lowest points in three months on Friday, indicating a substantial downturn ahead of the summer driving season with the Memorial Day holiday. U.S. crude oil fell to $76.15 during the day, marking its lowest level since February 26, while the global benchmark Brent dropped to $80.65, hitting its lowest point since February 8. Both benchmarks are set for weekly losses of about 4% and 3%, respectively.

Examining today’s energy prices, the West Texas Intermediate (WTI) July contract settled at $76.67 a barrel, down by 19 cents or 0.25%. Meanwhile, the Brent July contract closed at $81.13 a barrel, down by 23 cents or 0.26%. Despite these drops, year-to-date figures show a 7% increase for U.S. oil and a 5.3% rise for the global benchmark. With Tamas Varga noting Russia’s failure to stick to production cut commitments in April despite promises from OPEC+ members.

Looking ahead, OPEC and its allies, led by Russia, are set to have a virtual meeting on June 2 to review production policy, with expectations for the current production limit to continue. However, Varga suggests that such measures may not be enough to ease market worries, given the large supply cushion of nearly 6 million barrels per day (mbpd) amid apparent oversupply. This analysis highlights the complex interplay between geopolitical dynamics, macroeconomic indicators, and industry-specific challenges shaping oil prices today.


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