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By: Alex Hodes, Energy Analyst - KC Energy
Alex Hodes, Director of Energy Market Strategy, dissects the market forces driving a 20% swing in oil prices and the road ahead.
Hodes stresses that the cartel has moved from “provid[ing] a floor to the market” to adding barrels when prices are already weak, a “one-two punch” that deepened April’s slide. The shift unsettles traders who relied on OPEC to offset demand scares.
While tariff headlines revived recession talk, Hodes notes estimates of lost demand near “400,000 barrels per day… less than 1 % of global oil demand”. He argues that demand risks are “slightly overstated,” leaving supply policy as the dominant price driver.
The Dallas Fed survey puts new-well breakevens around $65 WTI. “Any prolonged time below that $60 per barrel, we’re going to start seeing more and more barrels come offline in the US”. Infrastructure bottlenecks and reduced capital spending already point to flat year-on-year output from 2024 to 2025.
Hodes calls the propane/ethane story “the biggest” petroleum angle of the tariff clash. With 80% of U S propane exported and 20% heading to China, April volumes fell 350 kb/d, almost wiping out bilateral trade. Beijing exempted ethane from new levies, yet Chinese propane-dehydrogenation plant utilisation slid from 69% to 60%, signalling weaker feedstock demand and potential knock-on effects for global LPG balances.
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---- Written by Gus Farrow
--- Expert: Alex Hodes, StoneX Director of Energy Market Strategy
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