By: Alex Hodes, Energy Analyst - KC Energy
Alex Hodes, Director of Energy Market Strategy at StoneX, outlines the price outlook for crude oil amid fresh OPEC + supply, softer U-S-China tariffs and diverging production costs.
“Our, our current models … have WTI prices aiming at $63 per barrel, mid 60s for the next month”. Hodes adds that Q2 projections rise toward $68, even after prices slid on OPEC+ plans to raise output.
Initial estimates put the earlier tariff-driven hit to global oil demand at roughly 400 kb/d. With duties reduced to 10%, that loss “is not going to impact global oil demand as strong as it had originally been expected”. The bigger lever is LPG: “We could actually see barrels still flowing to China” as propane remains economical under lower tariffs.
Dallas Fed surveys show shale operators “break even … about that $60 level”. Hodes expects U-S output growth to keep slowing if WTI stays under that threshold. Canadian oil-sands face similar challenges, while Saudi Arabia can still pump profitably near $30, though budgetary breakeven is much higher.
Even if higher-cost regions pause, Hodes singles out “Brazil and Guyana” where extraction and development costs are “substantially lower”. These basins, he argues, will remain “key drivers of supply growth over the next year or so” as projects sanctioned at lower break-evens come online.
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---- Written by Gus Farrow
--- Expert: Alex Hodes, StoneX Director of Energy Market Strategy
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