Oil prices continued to decline on Thursday, extending losses from the previous session, as fears of weakening global demand collided with expectations that OPEC+ may increase output. Brent crude dropped by 1.8%, while U.S. West Texas Intermediate fell 1.9%.
Saudi Arabia, the world’s largest oil exporter, has signaled a willingness to tolerate low prices and may push for further production increases at the upcoming OPEC+ meeting on May 5. Several members are reportedly advocating for a second consecutive month of supply hikes.
Compounding the downward pressure, the U.S. economy contracted in the first quarter for the first time since 2022. Analysts link the slowdown to trade tensions and a surge in imports driven by fears of rising tariffs. Factory activity in China has also hit a new low, intensifying concerns over global energy demand.
The oil market is reacting to both oversupply risks and economic uncertainty. Analysts at UBS and MUFG note that volatility in U.S. trade policy, particularly with China, is fueling anxiety. Meanwhile, data showed U.S. oil stockpiles fell by 2.7 million barrels last week, a bullish signal overshadowed by broader bearish trends.
In April, crude posted its largest monthly loss since 2021, dropping 16%, driven by a surprise OPEC+ decision to boost production. As non-OPEC producers like Guyana expand output, and political factors like U.S. sanctions on Russia remain in focus, analysts warn of a potential supply glut if demand continues to weaken.