Oil prices resumed their downward slide after OPEC and the oil producers' cartel over the weekend said they would pump more oil despite concerns that President Trump's trade war would curb demand.
US benchmark oil prices fell to around $56 per barrel from $58 on Friday. For many businesses, a steady decline means that drilling wells in the US is not beneficial, despite Trump's demand for increased production.
Prices were the last in early April, just before Trump said he would suspend mutual tariffs in most countries for 90 days. The announcement led to rallying in both the stock and oil markets, but oil prices are declining.
This is because OPEC Plus is simultaneously increasing production, so economists warn that higher tariffs on most US trading partners could slow global economic growth and cause a recession in the US.
The eight countries that make up OPEC Plus Cartel said on Saturday they will increase production even further in June.
Lower product prices have led some companies back. According to Baker Hughes, there are US oil fields with about 9% fewer wells in the Permian Basin than last year when oil was traded at nearly $80 barrels.
On Friday, two of the nation's largest oil and gas companies, Exxon Mobil and Chevron, reported lowest first quarter revenue in a few years. These financial results reflect the market before Trump escalates further Chinese tariffs in early April.
“It is clear that this uncertainty places emphasis on economic forecasts, causing significant volatility and increasing the prospect of slowing growth,” Exxon CEO Darren Woods told analysts.
