Background on Key Players and Their Influence
The recent fluctuations in global oil prices have significantly impacted Mexico’s oil market. In April, the price of the Mexican basket of exports experienced a substantial decline, dropping by 16.38%. This downturn is part of a larger trend affecting the international oil market, with major producers like Saudi Arabia and the United States influencing supply levels.
Key Players in the Global Oil Market
- Saudi Arabia: As one of the world’s largest oil producers, Saudi Arabia plays a crucial role in shaping global supply levels. In early April, Saudi Arabia pushed for increased production from the Organization of the Petroleum Exporting Countries (OPEC) and its allies, beyond initially planned levels.
- United States: As a significant oil producer, the U.S. also impacts global supply dynamics. President Donald Trump’s recent threats to impose sanctions on countries purchasing Iranian oil have further influenced market volatility.
April’s Oil Price Trends
In April, both the West Texas Intermediate (WTI) and Brent crude oil benchmarks experienced notable declines:
- WTI: The WTI contract for June closed at $58.04 per barrel, a 3.66% decrease on April 30.
- Brent: The Brent contract for June closed at $63.12 per barrel, a 1.76% decrease on April 30.
The month saw the WTI drop by 18.80% and Brent lose 15.55%, marking their largest decline since November 2021.
Mexican Oil Market Performance
The Mexican basket of exports closed at $55.79 per barrel on April 30, a 2.92% decrease. Consequently, the Mexican oil market ended April with a 16.38% loss.
May Market Rebound
Despite the April downturn, May began positively. Oil prices advanced nearly 2% on Thursday following President Trump’s threats to impose sanctions on countries purchasing Iranian oil, after the postponement of the fourth round of talks between the U.S. and Iran.
- Brent: Brent futures closed up 1.07 USD (1.75%) at $62.13 per barrel.
- WTI: WTI futures gained 1.03 USD (1.77%) to reach $59.24 per barrel.
The Mexican oil market did not trade on Thursday due to the Labour Day holiday.
Key Questions and Answers
- What caused the recent decline in oil prices? The drop was influenced by major producers like Saudi Arabia pushing for increased production and U.S. President Donald Trump’s threats of sanctions on Iranian oil purchases.
- Which oil benchmarks experienced the most significant declines in April? Both WTI and Brent crude oil benchmarks saw notable decreases, with WTI dropping 18.80% and Brent losing 15.55%.
- How did the Mexican oil market perform in April? The Mexican basket of exports fell by 16.38% in April, closing at $55.79 per barrel on the last trading day.
