Global crude prices edged higher Thursday following a steep selloff triggered by mounting signals of increased supply and weakening economic data. Brent crude futures rose 0.1% to $61.13 per barrel in early Asian trade, while West Texas Intermediate (WTI) nudged up just 1 cent to $58.22—still hovering near a 38-month low.
The downturn in oil markets came after reports indicated Saudi Arabia may increase output despite sliding prices. Meanwhile, the U.S. economy contracted in the first quarter, weighing further on the demand outlook.
“Crude markets are under dual pressure from potential OPEC+ supply boosts and softening global demand,” said Sugandha Sachdeva, founder of SS WealthStreet. “Brent crude looks increasingly likely to test $55 per barrel in the near term.”
OPEC+ Signals Output Flexibility
Saudi Arabia, a key OPEC+ player, is reportedly prepared to allow lower oil prices to persist, signaling a shift in strategy away from aggressive market support. Sources familiar with internal discussions suggest the kingdom is no longer seeking to prop up the market through unilateral production cuts.
Key developments from OPEC+:
- Saudi Arabia appears open to prolonged low prices
- Eight OPEC+ nations to meet May 5 on output decisions
- Several members pushing to accelerate production hikes
“Any unexpected scale or pace of output adjustments could spike volatility in coming sessions,” Sachdeva added.
The evolving stance reflects geopolitical and fiscal strategies that prioritize market share and budget discipline over price stabilization.
Demand Outlook Worsens Amid U.S. Contraction
The U.S. economy—the world’s largest oil consumer—contracted for the first time in three years, dampening optimism for energy demand recovery. A surge in imports, as businesses preempted tariffs, underscored the market disruptions caused by the Trump administration’s erratic trade policies.
Recent demand signals include:
- U.S. Q1 GDP shrank amid tariff-driven import surge
- Kpler cut its 2025 global oil demand growth forecast to 640K bpd
- Weak Indian consumption and rising Sino-U.S. tensions weigh on forecasts
A Reuters survey of 40 analysts downgraded 2025 price estimates:
- Brent crude: Now expected to average $68.98, down from $72.94
- WTI crude: Revised to $65.08, from $69.16
Despite this, U.S. crude inventories fell by 2.7 million barrels last week, signaling some resilience in export and refinery demand, according to the Energy Information Administration.
As traders digest evolving supply policies and shaky demand projections, oil prices are likely to remain volatile heading into the second half of 2025.
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