Oil Falls on Expectation of Big OPEC+ Output Hike, Trade Jitters

Fri, May 30, 2025

Oil extended its weekly decline ahead of an OPEC+ meeting that’s expected to lead to another big supply hike, while US President Donald Trump reignited trade tensions with China.

West Texas Intermediate futures slipped as much as 1.3% as OPEC+ was said to consider an output increase of more than 411,000 barrels a day in July, in a push for market share.

Meanwhile, Trump said China had violated its trade agreement with the US, reviving concerns around a tariff war between the world’s two largest economies.

OPEC+ has already announced unexpectedly large increases for May and June. A sub-group led by Saudi Arabia is set to meet on Saturday to decide on July production levels, following preliminary talks last week on a third consecutive supply increase.

“The real story now is tomorrow’s OPEC+ meeting among the eight producers that conducted voluntary cuts,” said Arne Lohmann Rasmussen, chief analyst at A/S Global Risk Management. “The increase is coming at a time of weak economic signals and heightened uncertainty, which is weighing on prices.”

The revival of idled output by OPEC and its allies at a faster-than-expected pace has raised concerns around a looming glut and helped to drag oil lower.

Fears over a global economic slowdown due to Trump’s tariffs has also put pressure on prices, though they now face legal uncertainties. A US trade court blocked parts of the president’s levies this week, deeming them illegal, while a federal appeals court has offered a temporary reprieve from the ruling.