Commodity Markets: Oil Price Hits Three-Month Low Below $70

The price of a barrel of oil has fallen to a three-month low below $70, representing a decline of as much as 7 percent over the past month. The key reason for this trend is the anticipated increase in oil supply after OPEC+ announced a gradual phasing out of its voluntary production cut plan of 2.2 million barrels per day, starting in April of this year.

OPEC+ members plan to increase daily production by approximately 140,000 barrels per month, which includes a gradual increase in production from the United Arab Emirates of an additional 300,000 barrels per day. This decision comes after a long period of production cuts, and according to an analysis by the Croatian Employers’ Association, the key reason for this turnaround can be found in the direct pressure from U.S. President Donald Trump, who called on OPEC+ to increase oil supply.

An additional factor influencing the price decline is the strong growth in production in Kazakhstan, which has reached a record 2 million barrels per day, primarily due to the expansion of capacity at the largest oil field, Tengiz. It is expected that the price of oil could fall in the short term to a range of $60 to $65 per barrel.

The Decline in Cocoa Prices Under Pressure from Increased Supply

Similar to the trend in the energy sector, cocoa prices are also experiencing a significant decline. Although the price of this food commodity is still above average, it has fallen nearly 20 percent over the past month, reaching a level of $8,300 per ton.

According to the Croatian Employers’ Association, one of the main reasons for this price drop is the announcement by the International Cocoa Organization (ICCO), which predicted a supply surplus of 142,000 tons for this season at the end of February. Additionally, reports from Côte d’Ivoire, the world’s leading cocoa producer, indicate improved weather conditions contributing to increased yields.

Abundant rainfall combined with sufficient sunshine hours has significantly improved the conditions for cocoa cultivation in key regions of Côte d’Ivoire. According to the analysis by the Croatian Employers’ Association, this year’s crop, estimated at 1.4 million tons, is already showing a 15% year-on-year increase. Given these circumstances, analysts expect further declines in cocoa prices below $8,000 per ton in the upcoming period.

The Croatian Employers’ Association emphasizes that price movements of commodities of this magnitude can have a significant impact on the global economy, as well as on the domestic market, particularly in the food industry and energy sectors. As further volatility is expected, close monitoring of market trends and adjustment of business strategies in accordance with new economic conditions is recommended.