Oil News: Bearish Oil Outlook as OPEC+ Production and Tariffs Weigh on Crude Futures

Weekly Losses Deepen on Tariff Worries and Rising Supply

Oil prices closed higher on Friday but logged notable weekly declines, pressured by growing fears of oversupply and lingering uncertainty in U.S.-China tariff negotiations.

Brent crude futures settled at $66.87 per barrel, gaining 32 cents on the day but down 1.6% for the week. U.S. West Texas Intermediate (WTI) crude finished at $63.02 per barrel, up 23 cents but posting a steeper 2.6% weekly drop.

China Tariff Exemptions Fail to Ease Market Nerves

Despite China announcing limited tariff exemptions on U.S. imports, the move failed to significantly bolster sentiment. Beijing swiftly denied President Trump’s claims that full-scale negotiations were underway, keeping traders cautious. Saxo Bank analyst Ole Hansen noted that the prolonged trade war among the world’s top consumers, combined with speculation around accelerated OPEC+ production hikes, has capped crude price gains in the near term.

Supply Concerns Weigh as OPEC+ Eyes Faster Output Hikes

Sources told Reuters that several OPEC+ members are pushing to accelerate oil output increases for June, following a larger-than-expected 411,000 barrels per day hike in May. Saudi Arabia, frustrated by overproduction from Kazakhstan and Iraq, led the call for quicker action. However, divisions persist, with Russia and others favoring a slower ramp-up to prevent a sharp price drop. Kazakhstan, meanwhile, signaled it would prioritize national output goals over group compliance, further complicating OPEC+ unity.

Baker Hughes Rig Count Adds to Bearish Sentiment

Fresh supply signals continue to build, with Baker Hughes reporting a two-rig increase in the U.S. oil-directed count, reaching 483. Additionally, prospects of a resolution in the Ukraine conflict could unlock more Russian crude for global markets, adding to the oversupply risk.

Market Outlook: Bearish Tilt on Rising Output and Trade Uncertainty

The oil market’s near-term outlook leans bearish, with traders bracing for additional supply from OPEC+ and persistent U.S.-China trade tensions limiting demand growth expectations. Without a clear resolution to these external pressures, oil prices could remain under downward pressure in the coming sessions.

Technically, the market has been straddling a key pivot on the daily chart at $63.02. A sustained move over it will signal the presence of buyers with the 50-day moving average at $66.20 the major target. A sustained move under the pivot could trigger an acceleration into a minor 50% level at $59.67.

More Information in our Economic Calendar.