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OIL: Crude Falls As OPEC Plans April Production Increase

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Oil prices fell sharply as OPEC unexpectedly said that it would go ahead with already-delayed plans to gradually increase output from April. Excess supply has been expected for 2025 for some time, and the decision to still go ahead pressured crude. 

  • WTI fell 1.9% to $68.47/bbl after a low of $67.89. It is currently holding just above initial support at $68.36.
  • Brent sank to $71.17/bbl following the OPEC news but is now down 1.8% to $71.51 below initial support at $71.92 opening $70.96. Monday’s move confirms the bearish outlook. There has been a clear break of the bear trigger at $73.54.
  • OPEC will increase production by 138kbd from April, a move which has already been delayed three times. While prices are subdued and non-OPEC output is likely to rise further, there has been considerable pressure within the bloc to increase quotas but it is coming at a time of heightened uncertainty around the demand outlook.
  • US President Trump has signed the order to add an extra 10% tariff on imports from China and has said that tariffs on goods from Canada and Mexico will go ahead. The US receives around 4mbd from Canada and 400kbd from Mexico.
  • There are reports that the US is looking at ways to ease sanctions on Russia, which would allow it to increase energy exports. 
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Oil prices fell sharply as OPEC unexpectedly said that it would go ahead with already-delayed plans to gradually increase output from April. Excess supply has been expected for 2025 for some time, and the decision to still go ahead pressured crude. 

  • WTI fell 1.9% to $68.47/bbl after a low of $67.89. It is currently holding just above initial support at $68.36.
  • Brent sank to $71.17/bbl following the OPEC news but is now down 1.8% to $71.51 below initial support at $71.92 opening $70.96. Monday’s move confirms the bearish outlook. There has been a clear break of the bear trigger at $73.54.
  • OPEC will increase production by 138kbd from April, a move which has already been delayed three times. While prices are subdued and non-OPEC output is likely to rise further, there has been considerable pressure within the bloc to increase quotas but it is coming at a time of heightened uncertainty around the demand outlook.
  • US President Trump has signed the order to add an extra 10% tariff on imports from China and has said that tariffs on goods from Canada and Mexico will go ahead. The US receives around 4mbd from Canada and 400kbd from Mexico.
  • There are reports that the US is looking at ways to ease sanctions on Russia, which would allow it to increase energy exports.