Oil prices resumed their downward slide after the OPEC Plus cartel of oil producers said over the weekend that it would pump more oil, despite concerns that President Trump’s trade war will curb demand.
The U.S. benchmark oil price fell to around $56 a barrel, from $58 on Friday. For many companies, the steady decline means it will not be profitable to drill wells in the United States despite Mr. Trump’s calls for increased production.
Prices were last around this level in early April, just before Mr. Trump said he would pause reciprocal tariffs on most countries for 90 days. That announcement led to rallies in both the stock market and the oil market, though oil prices have since waned.
That is partly because OPEC Plus is raising output at the same time that economists are warning that higher tariffs on most American trading partners will slow global economic growth and potentially cause a recession in the United States.
The eight countries that make up the OPEC Plus cartel said on Saturday that they would further ramp up production in June.
Lower commodity prices are causing some companies to pull back. There are about 9 percent fewer rigs drilling wells in the Permian Basin, the top U.S. oil field, than there were this time last year, when oil was trading near $80 a barrel, according to Baker Hughes.
On Friday, Exxon Mobil and Chevron, the two largest U.S. oil and gas companies, reported their lowest first-quarter earnings in years. Those financial results reflect the market before Mr. Trump further escalated tariffs on China in early April.
“It is clear that this uncertainty is weighing on economic forecasts, causing significant volatility and raising the prospects of slower growth,” Darren Woods, Exxon’s chief executive, told analysts.
