The M1 Brent futures contract has fallen more than $10 since mid-January and now sits at the lowest level seen since December 2021, trading at an intraday low of $68.50/bbl on 05 Mar. OPEC+ headlines on Monday (03 Mar) were the core focus of the market this week, with the cartel confirming plans to boost oil production. While the news itself was widely expected, the timing of the long-delayed announcement was anything but. This would be the OPEC+ first output hike since 2022, adding around 138kb/d of supply beginning in April. In addition, this week US President Trump implemented 25% tariffs on goods from Mexico and Canada, which increased concerns of poor crude demand and added to bearish sentiment in futures prices. Mexican state-owned Pemex is now seeking alternative markets and is in talks with potential buyers in China and Europe, while Canada relies on the US as the market for 90% of its exports. News of deteriorating Russia-Ukraine peace talks this week was not enough to bring bullish sentiment back to crude oil markets, with the US now withdrawing military aid for Ukraine after President Zelenskiy failed to sign the minerals deal last Friday. At the time of writing on 06 Mar, Apr’25 Brent futures has rebounded from its 3-year lows by $1, trading at $69.50/bbl. It remains to be seen whether buy-side interest could pick up or if this latest strength is a mere dead cat bounce.
