Oil Falls as OPEC+ Meeting Change Heightens Supply Glut Concerns
Oil slumped as OPEC+ pulled forward a meeting to weigh further production increases, inflaming concerns about swelling global supplies that have dragged down crude prices this year.
West Texas Intermediate futures slipped more than 1% to trade below $59 a barrel, down about 7% this week, after OPEC+ moved up its video conference to discuss June production levels by two days to May 3.
An aggressive supply boost from the cartel has the potential to batter a market already pressured by soft Chinese demand and plentiful output from outside the group. Saudi Arabia was expected to steer OPEC and its allies to another production increase at the gathering, and the move to an earlier meeting time outside of trading hours would allow more time for markets to absorb the decision.
“The market’s knee-jerk reaction is that the pull-forward for the call equals a pull-forward for more supply,” said Jon Byrne, an analyst at Strategas Securities. The last-minute schedule change likely signals that the cartel is accommodating the recent shift in market dynamics, he added.
Crude has shed about 18% this year — and briefly touched a four-year low last month — as the Trump administration’s tariffs fan concerns that energy demand will fall.
The drop in prices is already showing signs of squeezing a key industry that Trump pledged to help. Some of the biggest US shale-oil producers plan to slash about 4% of their drilling rigs by the end of the year. Chevron Corp. said on an earnings call on Friday that it would reduce share buybacks, citing a softening market.
WTI for June delivery fell 1.3% to $58.48 a barrel at 11:53 a.m. in New York.
Brent for July settlement slipped 1% to $61.50 a barrel.
Source: Bloomberg
