China’s tariff exemption cannot ease the market’s nerves
Despite China’s announcement of limited tariff exemptions on US imports, the move failed to significantly strengthen emotions. Beijing quickly denied President Trump’s claim. Saxo Bank analyst Ole Hansen said the long-term trade war among the world’s top consumers combined with speculation over the acceleration of OPEC+ production has kept the rise in gross prices in the near future.
Supply concerns, OPEC+ Eyes weighs as a faster output hike
Sources told Reuters that several OPEC+ members are pushing forward to increasing the larger barrels of 411,000 per day in May, accelerating the increase in oil output in June. Saudi Arabia is unhappy with overproduction from Kazakhstan and Iraq and has led a call for faster action. However, the division continues, with Russia and others supporting slow ramp-ups to prevent a sharp drop in prices. Meanwhile, Kazakhstan has shown that it will prioritize national production targets over group compliance, further complicating OPEC+ unification.
Baker Hughes Rig Count adds to bearish feelings
New supply signals continued to increase, Baker Hughes reported a two-rig increase in the US oil-oriented count, reaching 483. Furthermore, the outlook for solutions in Ukraine’s conflict could unleash the crudeness of Russia in the global market, and could increase the risk of oversupply.
Market outlook: Bearish tilts about rising uncertainty in production and trade
The oil market’s upcoming outlook is bearish, with traders offering additional supply from OPEC+ and sustained US-China trade tensions limiting expectations for growth in demand. Without a clear solution to these external pressures, crude oil prices could continue to be exposed to downward pressure in future sessions.
