Oil prices edged higher on Wednesday, climbing modestly from recent four-year lows, as global markets await key developments in U.S.-China trade negotiations and digest a fresh wave of supply increases from OPEC+.
At 9:16 a.m. WAT, Brent crude futures rose by 99 cents (1.3%) to $63.14 per barrel, while U.S. West Texas Intermediate (WTI) gained 81 cents (1.4%) to trade at $59.90 per barrel.
The bounce follows a sharp sell-off earlier in the week, triggered by news that eight OPEC+ countries, including Saudi Arabia and Russia, would ramp up oil production in June, igniting fears of an oversupplied market just as concerns over global demand linger.
The OPEC+ bloc announced a collective output increase of 411,000 barrels per day for June, up from 137,000 barrels in May. The move marks the second phase in a planned rollback of 2.2 million bpd in voluntary production cuts, originally introduced to stabilize prices amid sluggish demand and rising inventories.
“The gradual increases may be paused or reversed, subject to evolving market conditions,” OPEC+ said in a statement, emphasizing the group’s flexibility and intent to preserve market stability.
Despite the uptick in production, analysts expect U.S. supply to tighten slightly in the months ahead. Several American shale firms, including Diamondback Energy and Coterra Energy, have announced rig count reductions, signaling a potential dip in U.S. output that may help offset the global supply glut.
The U.S. Energy Information Administration (EIA) is set to release official inventory data later today, with early figures indicating a 4.5 million barrel drop in crude stocks for the week ending May 2, which could further support prices.
Trade and Earnings in Focus
Market sentiment is also being buoyed by anticipation surrounding upcoming U.S.-China trade talks, which investors hope could pave the way for improved economic cooperation and energy demand.
Meanwhile, in Europe, optimism is slowly returning. Companies are now expected to post 0.4% growth in first-quarter earnings an upward revision from the 1.7% contraction forecast just a week ago, according to analyst estimates.
OPEC+ Monitoring and Next Steps
The recent output decision came after a virtual meeting of the eight voluntary cut participants: Saudi Arabia, Russia, Iraq, UAE, Kuwait, Kazakhstan, Algeria, and Oman. The countries reaffirmed their pledge to adhere to the Declaration of Cooperation, and to compensate for any overproduction since January 2024.
The next OPEC+ ministerial meeting is scheduled for June 1, 2025, where production levels for July will be finalized.
