The front-month Brent futures contract weakened this afternoon, falling from $71.65/bbl at 12:00 BST to $69.60/bbl at 16:05 BST. While the contract has since recovered to $70.05/bbl at 17:10 BST (time of writing), we continue to see resistance at this level. Risk assets such as oil were pressured lower by US President Donald Trump’s tariff announcement last night amid fears that the tariffs could fan a broader trade war. However, this afternoon’s weakness was intensified by eight OPEC+ countries agreeing to advance the producer group’s planned output hikes to 411kb/d of oil in May 2025, an increase from the original plan to return 135kb/d of crude oil in May. OPEC+ cited “continuing healthy market fundamentals and the positive market outlook” behind this move and has said that further increases may be paused or reversed subject to revolving market conditions. In other news, Russia’s oil and gas revenue fell 17% y/y in March to 1.1 trillion roubles, according to Russia’s finance ministry. Revenue dropped by almost 10% y/y in Q1’25 to 2.64 trillion roubles. In macroeconomic news, the US ISM services PMI softened to 50.8 in March 2025, its lowest reading since June 2024 (Feb 2025: 53.5). The ISM services employment index fell to 46.2 in March (Feb: 53.9). Meanwhile, the US Commerce Department’s Bureau of Economic Analysis (BEA) reported that the US trade deficit narrowed by 6.1% to $122.7 billion in February from a record $130.7 billion in January 2025. However, imports were unchanged m/m at $401.1 billion in Feb 2025 as businesses rushed to import goods into the US before President Trump’s tariffs kicked in. Exports increased to a record high of $278.5 billion. Finally, at the time of writing, the Jun/Jul’25 and Jun/Dec’25 Brent futures spreads stood at $0.60/bbl and $2.70/bbl, respectively.
