Oil News: Crude Slumps Toward $59.67 as Oil Demand Outlook Turns Bearish

Oil Prices Drop as Trade War Clouds Demand and Margins Shrink

Light crude oil futures extended losses on Tuesday, slipping for a second consecutive session as bearish sentiment intensified. Sellers pushed prices further from a key resistance level at $63.06, with technical signals pointing to $59.67 as the next downside target. The pressure comes amid deepening investor concern over weaker global oil demand tied to growing trade tensions.

At 11:38 GMT, Light Crude Oil Futures are trading $60.96, down $1.09 or -1.76%.

Trade War Sparks Demand Concerns and Forecast Revisions

Crude prices declined after prolonged U.S.-China trade tensions re-ignited fears of a slowdown in global demand. Analysts at PVM warned that stalling negotiations are eroding confidence in economic growth, prompting a wave of oil demand downgrades.

Barclays cut its 2025 Brent crude forecast by $4 to $70 per barrel, citing the potential for a 1 million barrel-per-day supply surplus this year fueled by softening demand and a shift in OPEC+ output strategy.

U.S. President Donald Trump’s broad tariff stance has raised the specter of a global recession, with China retaliating by imposing its own levies on U.S. goods. This trade standoff between the world’s top two oil consumers has undermined bullish oil prices projections and accelerated bearish market expectations.

OPEC+ Eyes Output Increases as Stockpiles Build

Adding to the supply-side pressure, several OPEC+ members are reportedly pushing for increased production in June—marking a second straight month of potential supply expansion. Meanwhile, U.S. crude inventories are expected to have risen by 500,000 barrels in the week ended April 15, according to a Reuters poll. The American Petroleum Institute’s stockpile estimates are due Tuesday, with markets watching closely for confirmation of growing U.S. crude supplies.

Investor Sentiment Worsens with Refinery Outages and Buyback Risks

Monday’s session saw major contracts lose around $1 per barrel, partially due to unexpected refinery outages in Spain linked to a widespread power blackout. Though power has been restored, investor confidence remains shaky.

Big Oil is also under pressure. Falling prices have analysts questioning whether companies like Chevron and BP will scale back shareholder returns. Chevron may slash buybacks below its $10–20 billion range, while Exxon is expected to maintain payouts due to stronger cash reserves. Still, analysts warn that capital spending cuts may follow if prices remain subdued.

Bearish Oil Prices Forecast as Supply Outpaces Demand

With Brent prices averaging around $66 this month and bearish revisions from the EIA and major banks, the outlook for crude remains weak. Broad macro risks from trade policy, rising inventories, and OPEC+ supply growth are driving a bearish oil prices forecast in the near term. Traders should prepare for continued downside pressure as demand expectations deteriorate and market fundamentals soften.

More Information in our Economic Calendar.