Crude oil prices inched higher in early trading Monday after U.S. President Donald Trump extended the deadline for trade negotiations with the European Union. Brent crude futures rose 18 cents, or 0.28%, to $64.96 a barrel, while U.S. West Texas Intermediate (WTI) added 17 cents, or 0.28%, to $61.7 a barrel by 0653 GMT.
The decision followed Trump’s weekend statement that he and European Commission President Ursula von der Leyen had agreed to push the tariff decision to July 9, giving negotiators more time to strike a deal. The move relieved market fears that aggressive U.S. tariffs could disrupt global trade and energy demand.
- Oil prices had already gained 0.5% on Friday on limited U.S.-Iran nuclear progress.
- U.S. traders also covered positions ahead of the Memorial Day weekend.
However, ongoing uncertainty around Trump’s trade policies and fiscal concerns continue to cloud the energy market outlook.
U.S. Rig Count Drops; OPEC+ Faces Pressure
Support for oil prices also came from Baker Hughes data, showing U.S. firms cut oil rigs by 8 to 465, the lowest count since November 2021. The decline highlights the impact of recent price softness on U.S. production activity.
Meanwhile, the focus shifts to the upcoming OPEC+ meeting, where members could decide to boost output by 411,000 barrels per day (bpd) for July. Analysts are split on the impact:
- DBS Bank’s Suvro Sarkar warned that OPEC+’s accelerated production hikes risk triggering a “mini oil price war.”
- Phillip Nova’s Priyanka Sachdeva cautioned that the second half of 2025 might see oversupply risks as the group considers unwinding the remaining 2.2 million bpd voluntary cuts.
OPEC+ has already raised output targets by 1 million bpd for April through June, adding to global supply pressures.
Oil Market Outlook: Balancing Supply Risks
While Monday’s gains suggest cautious optimism, several headwinds remain for oil prices. Trump’s inclination toward broader tariffs and U.S.-EU trade friction could weigh on global demand. Additionally, OPEC+’s potential output increases might tilt the market toward oversupply.
- Energy markets remain sensitive to macroeconomic and geopolitical cues.
- A balance of demand resilience and supply discipline will be key for sustaining oil prices.
In the near term, oil traders will be watching OPEC+ decisions and further updates on U.S. trade policy. If Trump’s July 9 deadline brings more clarity, crude prices could stabilize. However, absent firm progress, risks of oversupply and falling demand may put renewed pressure on the market.