From Yahoo Finance: 2025-05-02 15:19:00

Oil prices slumped as OPEC+ discussed a second production increase, sparking concerns about oversupply. Futures fell 1.6% to around $58 a barrel, down over 7% for the week. Key OPEC+ nations are considering a 400,000 barrel-a-day increase in June, pushing prices near 2021 lows.

The potential supply boost could further pressure the market already strained by weak Chinese demand and excess output. TD Cowen strategists warned of inventory increases by 200 million barrels, potentially dropping crude to the low $50s. Brent prompt spread narrowed, signaling expectations of ample near-term supplies.

Crude has dropped 19% this year, with the Trump administration’s tariffs fueling concerns of falling energy demand. US shale-oil producers plan to cut drilling rigs by 4% by year-end. Chevron Corp. announced reduced share buybacks due to a softening market, highlighting the impact of falling prices.

The news of China exploring talks with the US to ease trade tensions was overshadowed by bearish OPEC+ developments. Trump’s pledge to impose secondary sanctions on Iranian oil buyers added pressure on Tehran. Top buyers like China and India, involved in the US-led trade war, may face economic strain from the indirect penalties.

The uncertainty around potential OPEC+ production increases and geopolitical tensions continues to weigh on oil prices. The market remains volatile as global economic conditions and trade conflicts impact demand and supply dynamics. Investors are closely monitoring developments to gauge the future direction of crude oil prices.

Read more: Oil Falls as OPEC+ Weighs Another Major Production Increase