Oil prices are set to post a weekly loss of more than 2%, driven by renewed concerns over oversupply and continued ambiguity in U.S.–China trade relations.
A key factor weighing on the market is the growing output from OPEC+ members. Some producers within the alliance are pushing to accelerate supply increases, raising the risk of a surplus at a time when demand growth remains fragile. The group is expected to meet on May 5 to discuss production plans for June, with internal disputes over quota compliance adding to uncertainty.
On the geopolitical front, trade tensions between the U.S. and China continue to impact investor sentiment. Although President Trump suggested negotiations are ongoing, Chinese authorities have publicly denied any active discussions and insist that Washington must first remove its unilateral tariffs. Nevertheless, Beijing is reportedly considering exemptions on certain U.S. imports, including ethane, indicating concern over the economic toll of the prolonged trade dispute.
The broader financial markets have reacted to the conflicting messages with caution. Energy stocks and commodities have experienced increased volatility, with oil retreating from earlier gains. A stronger U.S. dollar has also added pressure to crude prices.
Despite the bearish backdrop, there are signs of tightness in the near term. Both Brent and WTI futures are currently in backwardation — a market condition where near-term contracts trade at a premium to later ones — often viewed as a signal of short-term supply constraints.
However, analysts remain cautious. “Conflicting headlines on the U.S.–China tariff situation aren’t helping sentiment,” said Priyanka Sachdeva, senior market analyst at Phillip Nova. “Oil investors should be biased toward the downside.”