Oil prices extended losses in Asian trading on Friday after tumbling over 6% in the previous session, as OPEC+ agreed to speed up output increases, while U.S. President Donald Trump’s sweeping tariffs further eroded market sentiment.
As of 21:33 ET (01:33 GMT), Brent Oil Futures expiring in June fell 0.4% to $69.84 per barrel, while West Texas Intermediate (WTI) crude futures declined 0.5% to $66.17 per barrel.
Both contracts had declined more than 6% on Thursday.
OPEC+ to ramp up output, sparks oversupply concerns
Eight members of OPEC+, the group which includes the Organization of Petroleum Exporting Countries and allies led by Russia, on Thursday announced plans to accelerate production increases.
The cartel agreed to boost output by 411,000 barrels per day, a faster pace than previously planned.
The decision came in response to mounting pressure from consumer nations, including the United States, to help curb rising fuel prices and ease inflationary pressures.
The sharp decline in oil prices reflects investor concerns that the additional supply could outstrip demand, especially as economic uncertainties persist.
High interest rates, slowing global growth, and China’s uneven economic recovery have raised doubts about whether demand can keep up with rising production levels.
Traders also worry that a potential economic slowdown in major economies could further dampen oil consumption, putting additional downward pressure on prices.
Trump tariffs lead to recession fears; US payrolls data on tap
President Donald Trump’s recent announcement of sweeping tariffs has significantly impacted global oil prices, which have plummeted over 6%, marking the steepest decline in three years.
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The universal 10% tariff on all imported goods, coupled with higher, country-specific tariffs—such as the 54% levy on Chinese imports—has intensified fears of a global economic recession. Such an environment could diminish industrial activity and reduce consumer spending, leading to a decreased demand for oil.
The imposition of hefty tariffs on China, a major consumer and importer of crude oil, is also concerning.
China’s significant role in the global energy market means that these tariffs could lead to a substantial reduction in its oil imports.
Furthermore, these tariffs have prompted apprehensions about escalating trade disputes and retaliatory measures from affected countries. Such trade tensions can disrupt global supply chains and hinder economic growth, further dampening the demand outlook for oil.
Looking ahead, investors await Friday’s payrolls report and a speech by Federal Reserve Chair Jerome Powell for insights into the health of the U.S. economy and the direction of monetary policy.