Oil Continues Fall with Eyes on OPEC+ Supply, Tariff Outlook
Oil continued to fall as investors weighed the prospect of more OPEC+ supply and the impact of trade tensions between the U.S. and China.
Brent was trading near $66 a barrel after falling 2% on Wednesday, while West Texas Intermediate was above $62. Some members of the producer group will seek an even bigger supply increase in June as a dispute over quota compliance worsens, Reuters reported, citing people familiar with the matter.
Growing tensions within the group, particularly with Kazakhstan, have raised fears of a price war. The Organization of the Petroleum Exporting Countries and its allies will meet on May 5 to decide what to do in June.
“Internal discord within OPEC+ has heightened the risk of a supply shortfall, while persistent tariff tensions continue to weigh on macro sentiment,” said Zhou Mi, an analyst at a research house affiliated with Chaos Ternary Futures Co.
“Against this backdrop, crude oil may continue its downward trend.” Oil has fallen sharply this month on concerns that U.S. tariffs and counter-levies from its biggest trading partner will hurt economic activity and hurt energy demand.
While there are signs of easing tensions between Washington and Beijing, Treasury Secretary Scott Bessent said President Donald Trump has not offered to unilaterally remove the duties. Meanwhile, U.S. crude inventories rose by 244,000 barrels last week, according to government data. That compares with an industry report that indicated supplies had fallen by the most this year. Still, some metrics point to a bullish near-term market. The flash spread for benchmark Brent is in its widest backwardation since January, a structure that signals tighter supplies.
Brent for June settlement was little changed at $66.27 a barrel at 10:31 a.m. in Singapore.
WTI for June delivery was steady at $62.39 a barrel after falling 3.2% on Wednesday, the biggest loss in two weeks.
Source: Bloomberg
