Crude oil futures extended losses for a fourth straight session this week, weighed down by OPEC+’s decision to incrementally boost production and persistent global trade disputes threatening demand.
The alliance confirmed plans to unwind 138,000 barrels per day of output cuts starting in April, signaling the first phase of a broader strategy to restore nearly 6 million barrels per day slashed since 2022. While the move aims to stabilize long-term supply, analysts warn it risks deepening price declines if consumption fails to rebound amid economic uncertainty.
The bearish sentiment has been compounded by escalating trade tensions, particularly U.S. tariffs targeting key energy suppliers like Canada, Mexico, and China. Higher import costs could inflate domestic gasoline prices, straining consumer wallets and potentially curbing spending on fuel. Economists caution that such inflationary pressures, paired with slowing growth indicators, might further dent oil demand. Markets remain wary as tariff threats loom over additional economies, threatening to disrupt trade flows and amplify fears of a global economic cooldown.
The fragile balance underscores OPEC+’s challenge: boosting output to meet theoretical demand without oversupplying a market already rattled by softening U.S. economic data. With storage levels rising and refinery activity lagging seasonal norms, traders suggest the cartel’s cautious production approach may prove insufficient to counter headwinds. As one energy strategist noted, “The supply taps are opening just as storm clouds gather over demand. It’s a recipe for volatility.” For now, oil markets tread cautiously, bracing for a spring defined by geopolitical maneuvering and uncertain demand signals.
