There are analyses suggesting that international oil prices are likely to decline gradually.
According to Hana Financial Group on the 18th, international oil prices significantly adjusted as the tariff war originating from the United States intensified. West Texas Intermediate (WTI), which recorded an average of around $72 in the first quarter, has remained in the low $60 range after plummeting in early April, fully reflecting the possibility of economic slowdown. Major energy institutions, including the International Energy Agency (IEA), the Organization of the Petroleum Exporting Countries (OPEC), and the U.S. Energy Information Administration (EIA), have been lowering their forecasts for crude oil demand in consideration of the negative effects of the trade disputes on the economy.
Jeon Gyu-yeon, a researcher at Hana Financial Group, noted, 'The additional supply from the Organization of the Petroleum Exporting Countries (OPEC) and its coalition of major oil-producing nations, OPEC+ (OPEC Plus), may not be as substantial as expected.' He mentioned, 'OPEC+, which has committed to restoring voluntary cuts of 2.2 million BARRELs per day by September of next year, has shown cautious behavior as oil prices have sharply declined.'
Furthermore, the researcher stated, 'While they will not reverse the production increase plan, they will prepare compensation plans for countries that have exceeded their quotas, effectively allowing both production increases and reductions to coexist,' stating that 'ultimately, the goal is to recover production levels, but this implies a willingness to adjust the scale of increases in response to immediate market conditions.'
Additionally, the researcher explained, 'Expectations for a recovery in crude oil demand are not high, so the phase of oversupply will likely be maintained. However, if U.S. production gradually adjusts and the pace of OPEC+ increases is not as fast as expected, there is a high possibility that the decline in international oil prices will unfold gradually.' He estimated that WTI would likely trend downward within a band of $55 to $70 per BARREL.
The researcher added, 'U.S. crude oil production is generally maintaining a historically high level, and oil consumption has slightly declined, leading to a steady increase in commercial crude oil inventories since early January.' He noted, 'While gasoline inventories are seasonally bound to decline, the rate of decrease is slower compared to the past. Considering crude oil inventories and the break-even point (BEP) for shale companies, there is a high likelihood that U.S. oil production will gradually adjust.'