Crude oil prices are falling which increases the risk, oil giants may cut dividends and share buybacks.

After rising in the first two trading days, crude oil futures closed lower on Monday. The market is concerned about OPEC+ potentially increasing production, as well as the lack of transparency in US-China trade relations, which have put pressure on oil prices. Aldo Spangier, energy strategist at BNP Paribas, pointed out that Kazakhstan recently prioritized "national interests over production quotas," causing concerns about unity within OPEC+. The institution warned that if Kazakhstan does not adhere to production cuts as promised, OPEC+ supply in June could increase significantly, becoming the "biggest bearish factor in the current market." The bank maintains its forecast of Brent crude oil at $60-70/barrel for the second quarter and $70/barrel for the third quarter. Forex.com analyst Razan Hilal added that OPEC+ may choose to sacrifice short-term oil prices for long-term market share, but a sustained rebound will require substantial progress in trade negotiations and economic data to align. The ongoing direction of US-China trade relations continues to affect the market. Gary Cunningham, market research director at Tradition Energy, stated: "The cautious stance in trade negotiations is eroding market confidence. If a breakdown in negotiations leads to a drop in Chinese demand, oil prices will come under heavy pressure." In recent months, New York Mercantile Exchange crude oil and Brent crude oil for June delivery contracts fell by 1.5% to $62.05/barrel and $65.86/barrel, respectively. Meanwhile, US natural gas futures saw significant gains, with May contracts rising by 7.9% to $3.170/million British thermal units. Exxon Mobil Corporation (XOM.US) and Chevron Corporation (CVX.US) are among the large oil companies set to announce their first-quarter performance this week. Investors will be watching how falling oil prices may increase risks for dividends and stock buybacks for the remainder of 2025. The global benchmark Brent crude oil averaged $74.98/barrel in the first quarter, a 1.3% increase from the previous quarter, but prices started to plummet after Trump announced tariffs on trading partners on April 2nd. Some analysts suggest that if oil prices remain weak, Chevron Corporation may reduce stock buybacks, as the company needs Brent crude oil prices of $95/barrel to meet dividends and buybacks, while Exxon Mobil Corporation needs $88/barrel. RBC Capital stated that both companies can afford dividends at around $55/barrel. Bank of America Corp analysts assume a Brent crude oil price of $60/barrel in 2025 and predict Chevron Corporation will buy back $11 billion worth of stocks this year, at the lower end of expectations, while Exxon Mobil Corporation will buy back $13.5 billion worth of stocks, below its $20 billion target. Analysts generally believe that Exxon Mobil Corporation is better positioned to maintain dividends and buybacks due to its surplus cash on the balance sheet and efforts to lower production costs for oil and natural gas.