Oil prices return to decline

After the negotiations between the world's two largest economies, the US and China, with good progress, positive market sentiment has supported crude oil prices to rise to the $60/barrel area. However, the oil market is facing a clearer reality: excess supply will push oil prices down.

Oil prices plunge on supply concerns

According to MXV, all 5 commodities in the energy group fell sharply after the end of yesterday's trading session. In particular, the price of 2 crude oil commodities simultaneously weakened by more than 2% to 61.6 USD/barrel for WTI oil and 64.5 USD/barrel for Brent oil. Concerns covered the market when information about oil supply from Iran could soon return, increasing the pressure of oversupply in the global market.

The main driver of yesterday's sharp drop in oil prices came from new developments in negotiations between the US and Iran over Tehran's controversial nuclear program. US President Donald Trump announced that the two countries had resolved many disagreements and were very close to a new agreement.

The US and Iran's move towards a new nuclear deal not only opens up the possibility of lifting many of Washington's sanctions on Tehran, but also means that energy exports from Iran - OPEC's third-largest oil producer - could soon be restored to the international market.

According to analysis by SEB bank (Sweden), if sanctions are eased within the framework of a nuclear deal, the global market could receive an additional 800,000 barrels of crude oil per day from Iran, significantly increasing supply and potentially creating a surplus in a context where demand has not shown signs of strong recovery.

This scenario has reinforced the prospect of a global crude oil surplus, especially after two unusual decisions to increase production by the OPEC+ group in recent times. Notably, in its May report, the International Energy Agency (IEA) raised its forecast for global supply growth to 1.6 million barrels per day this year, an increase of 380,000 barrels per day compared to its previous forecast. According to the IEA, this increase far exceeds the forecast for global oil demand growth, which is only 740,000 barrels per day in 2025. The large gap between supply and demand puts the oil market at risk of a prolonged oversupply, creating strong downward pressure on prices.

The decline in oil prices was also fueled by the speech of the Chairman of the US Federal Reserve (Fed) Jerome Powell at the Thomas Laubach Research Conference in Washington, DC yesterday. Chairman Powell reaffirmed the target of controlling inflation at 2% and expressed the view of maintaining high interest rates at 4.5%, despite inflation indicators such as CPI and PPI recently showing a more stable trend. Keeping high interest rates not only pushes the USD price up sharply but also slows down the US economic recovery, thereby negatively affecting the outlook for global crude oil demand.

Soybean prices fall sharply

In the agricultural market, soybean prices fell sharply by nearly 2.5% to $386/ton, ending a five-session winning streak. The main reason was the plunge in soybean oil prices due to rumors that the 2026 biofuel blending obligation (RVO) was lower than expected, triggering a wave of profit-taking.

The USDA report showed that new crop exports from the US reached only 282,000 tonnes, down 25%, adding to the pressure on soybean prices. Argentina raised its production forecast to 48.5 million tonnes thanks to high yields. Record crushing volume in the US, rising soybean oil inventories to a 10-month high, added to the downward pressure on prices. Forecasts of hot and dry weather in the US also affected the market.

Source: https://baochinhphu.vn/gia-dau-quay-lai-da-suy-yeu-102250516094449884.htm