Oil prices fell sharply on Friday, with U.S. crude dropping more than $1 during the day, as investors anticipated that OPEC+ would agree to a larger-than-expected production increase for July. Brent crude futures settled down 25 cents, or 0.39%, at $63.90 a barrel. U.S. West Texas Intermediate (WTI) crude finished down 15 cents, or 0.25%, at $60.79 a barrel
These declines came as the market digested reports that OPEC+ may raise output beyond the 411,000 barrels per day previously decided for May and June. Analysts warned that such a move could worsen the current global supply surplus, which JPMorgan estimates at 2.2 million barrels per day. The potential increase in output has raised concerns that prices will continue to weaken, with some forecasts suggesting crude could fall into the high $50s by the end of the year.
Trade tensions also added pressure on oil prices. A post on Truth Social by U.S. President Donald Trump, suggesting possible new tariff actions against China, reignited fears of a renewed trade conflict. This followed a federal appeals court ruling that temporarily reinstated Trump’s sweeping tariffs, reversing a previous decision to block them. Analysts noted that uncertainty around trade policy continues to be a significant headwind for oil markets.
In addition, U.S. economic data showed a slowdown in consumer spending in April, signaling potential weakness in fuel demand just as the summer driving season begins. This data, combined with expectations of increased oil supply, deepened concerns that demand growth may not keep pace with expanding production.
As a result, both Brent and WTI benchmarks were headed for weekly losses of over 1%. With OPEC+ set to meet on Saturday, market participants will be closely watching for confirmation of production decisions that could shape the direction of oil prices in the coming weeks.