Oil Prices Set for Weekly Decline Amid Oversupply Concerns

Global oil prices dropped on Friday and are on track for a weekly loss of over 2%, driven by fears of oversupply and heightened uncertainty surrounding trade relations between the United States and China.

U.S. West Texas Intermediate (WTI) crude fell by 36 cents, settling at $62.43 per barrel, marking a 3.5% decline for the week.

According to Anh Pham, Senior Analyst at LSEG, “On a weekly basis, prices are down due to persistent concerns over excess supply from OPEC+, while the demand outlook remains shaky amid ongoing trade tensions. A stronger U.S. dollar has also weighed on crude prices.”

Earlier gains in the oil market were reversed after a spokesperson for China’s Foreign Ministry stated that no active tariff negotiations were taking place with the United States. This contradicted U.S. President Donald Trump’s claim on Thursday that trade talks were still in progress.

Ole Hansen, an analyst at Saxo Bank, noted that “Traders now view further crude price gains as unlikely in the short term due to ongoing trade frictions between major global consumers and speculation that OPEC+ could accelerate output increases as early as June.”

In a move reflecting economic caution, China has exempted certain U.S. imports from its 125% tariffs, requesting businesses to identify essential goods for tariff waivers. This action signals Beijing’s increasing concern over the trade war’s economic toll.

The broader market remains jittery, with oversupply fears intensifying after several OPEC+ members hinted at the possibility of speeding up oil production hikes in June, according to a recent Reuters report.

Adding to the complexity, Russian Foreign Minister Sergey Lavrov revealed in an interview with CBS News that progress is being made in peace efforts with the U.S. to end the war in Ukraine. While details remain unresolved, any easing of the conflict and lifting of sanctions could allow more Russian oil to enter the global market, potentially increasing supply pressures further.

Russia, a top oil producer and key member of OPEC+, alongside Saudi Arabia and the U.S., plays a major role in global energy dynamics.

As supply-side uncertainties grow and geopolitical tensions persist, oil markets may continue to face downward pressure in the short term.