Oil Prices Ease As Supply Boost Sparks Sell-Off
Crude oil prices were steady in early Asian trade on Thursday, finding their footing a day after a sharp decline triggered by signs that Saudi Arabia could increase output and data showing the U.S. economy contracting.
Brent crude futures were up 7 cents, or 0.1%, at $61.13 a barrel by 0318 GMT. U.S. West Texas Intermediate crude was up 1 cent, or 0.02%, at $58.22. WTI closed at its lowest since March 2021 on Wednesday.
“In the short term, the path of least resistance remains to the downside,” said Sugandha Sachdeva, founder of SS WealthStreet, a New Delhi-based research firm.
“The twin impacts of worsening demand and looming supply expansion have created a bearish outlook for crude, with Brent crude looking vulnerable to test $55 a barrel,” Sachdeva said.
Saudi Arabia has told allies and industry experts it is unwilling to prop up the oil market with supply cuts and can manage a prolonged period of low prices, sources familiar with the talks said.
Some OPEC+ members will suggest the group accelerate output increases in June for a second straight month, three people familiar with the talks said. The eight OPEC+ nations meet on May 5 to decide on June output plans.
“Any surprises in the pace or scale of production adjustments could significantly affect volatility in the coming sessions,” Sachdeva said.
In the U.S., the world’s biggest oil consumer, the economy contracted for the first time in three years in the first quarter, swamped by a flood of imports as businesses scrambled to avoid higher tariff costs and underscoring the disruptive nature of President Donald Trump’s often chaotic trade policies.
Trump’s tariffs have made it more likely the global economy will slide into recession this year, according to a Reuters poll.
The demand outlook clouded by the trade dispute coupled with OPEC+’s decision to increase supply will weigh on oil prices this year, a Reuters poll showed on Wednesday.
Analytics firm Kpler has revised its forecast for global oil demand growth in 2025 to 640,000 barrels per day from 800,000 barrels per day, citing rising Sino-U.S. trade tensions and weaker Indian demand.
A survey of 40 economists and analysts in April projected Brent crude to average $68.98 a barrel in 2025, compared with a March forecast of $72.94. They expect U.S. crude to average $65.08 a barrel instead of the $69.16 seen last month.
U.S. crude stocks fell by 2.7 million barrels last week on higher export and refinery demand, the Energy Information Administration said on Wednesday. That compared with analysts’ expectations in a Reuters poll for a 429,000-barrel build.
Source: Investing.com
