Oil News: Crude Outlook Turns Bleak as OPEC Ramps Supply Into Weak Demand

Global Demand Grows Fragile as Trade Tensions Deepen

Oil markets spent the week weighed down by increasingly fragile demand signals, especially from China. April’s official manufacturing PMI fell sharply to 49.0, indicating contraction for the world’s second-largest economy. Export orders dropped to their weakest level since 2012—outside pandemic periods—highlighting the trade war’s impact on China’s industrial base. Analysts warned that promised government support measures may not be enough to counteract lost external demand, and lowered GDP expectations now point to the weakest growth in years.

Trade War Fears Sink Market Confidence

Investor sentiment was further dampened by deteriorating U.S.-China relations. The U.S. administration’s fresh round of tariffs reignited fears of a broader economic slowdown, while China’s Commerce Ministry responded cautiously, calling for a review of the proposed talks. With the world’s two largest oil consumers at odds, traders are preparing for prolonged demand weakness. Energy analysts now expect global oil consumption growth to fall short of earlier projections, with a number of banks revising forecasts lower.

OPEC+ Supply Signals Add to Market Pressure

On the supply side, expectations grew that OPEC+ would move toward more aggressive production growth. Several members openly backed raising output into June, citing internal unity and market share concerns. Saudi Arabia, the bloc’s de facto leader, signaled it would not support fresh supply cuts, suggesting a shift away from price defense. Meanwhile, rising U.S. crude inventories confirmed a well-supplied market. The American Petroleum Institute reported a significant build, while EIA data pointed to sustained U.S. production strength.

Geopolitical Risks Offer Little Lasting Support

Geopolitical developments—including tensions with Iran—briefly stirred market interest, but failed to offset broader bearish sentiment. The U.S. reiterated threats of secondary sanctions on buyers of Iranian oil, but traders largely dismissed these as noise in a market dominated by demand concerns and structural oversupply. Risk premiums were short-lived and insufficient to drive sustained buying interest.

Oil Prices Forecast: Bearish Outlook as OPEC+ Ramps Up Supply

The bearish outlook hardened over the weekend, as OPEC+ officially agreed to increase production again in June, bringing total supply growth over two months to more than 800,000 barrels per day. This decision, led by Saudi Arabia and backed by eight key members, caught the market off guard and exceeded most analyst forecasts.

Combined with weak demand growth and constrained investment across the sector, the market now faces a clear oversupply threat. Fundamentals point to a bearish oil prices forecast in the near term unless there’s a marked improvement in economic conditions or a surprise policy reversal from OPEC+.

Technically, the downside momentum is strong with nearby targets $54.48 and $52.45. In the upside, the nearest resistance is $59.67, followed by $63.06.

The market will have to overcome $64.87 to shift momentum to the upside, but the long-term trend will remain bearish until buyers can overtake the 52-week moving average at $68.51.

More Information in our Economic Calendar.