April 28, 2025
The oil market faces a potential glut as members of OPEC+ will pump more crude into the global market officially from May. However, oil prices dropped early on Monday an induction by China that Beijing is at home with her reciprocal tariffs against the US.
International benchmark Brent crude traded at $65.83 per barrel falling by around 0.06%, while the US benchmark West Texas Intermediate declined by about 0.13%, reaching $62.85 per barrel, compared to its prior session close of $62.93.
In an interview with Time magazine published Friday, US President Donald Trump, stated that tariff negotiations were underway with China, a position that was refuted by Beijing.
This mixed signals, have more to say about the progress of efforts to ease a trade war. Trump mentioned that the US had made 200 tariff deals and claimed that China’s President Xi Jinping had called him.
READ MORE; China to raise tariffs on U.S. goods to 125% Saturday
However, Jefferies analyst Shujin Chen, said in a research note that China may not be eager to negotiate with the U.S. on trade tensions, Given the different priorities and policy stances, as well as China’s domestic support for firm countermeasures, Beijing is likely not in a hurry to negotiate, she says.
Conflicting statements on US-China trade talks are fueling concerns about the global oil demand outlook. Concerns are also raised over potential oversupply in global oil markets which might also weighed on prices.
Eight OPEC+ countries are reportedly considering accelerating production hikes for a second consecutive month by June. This comes after the group’s decision to raise output by 411,000 barrels per day (bpd) from May, up from the initially planned 138,000 bpd.
Saudi Arabia, Russia, Iraq, the UAE, Kuwait, Kazakhstan, Algeria, and Oman are scheduled to hold a video conference on May 5 to decide on supply plans for June.
