Supply Worries and Geopolitics Weigh Heavily on Market
Crude oil markets posted sharp losses this week, with traders contending with a barrage of supply-driven headwinds and persistent geopolitical uncertainty. Brent finished down, while WTI sank, as the weight of potential new supply and fragile global demand expectations kept buyers cautious.
Last week, Light Crude Oil Futures settled at $63.02, down $0.99 or -1.55%.
This week, the pivot at $63.06 will control the short-term direction of the market.
A sustained move over this level will indicate the presence of buyers. If this creates enough upside momentum then look for a near-term surge into the 52-week moving average at $69.00. It is controlling the long-term trend which is down.
If traders push the market below $63.06 decisively then watch for a pullback into $59.67, followed by the multi-month low at $54.48.
Macroeconomic Strains Erode Demand Outlook
Broader economic concerns compounded the bearish tone. The International Monetary Fund cut its U.S. growth forecast to 1.8% for 2025 and raised inflation expectations to 3%, bolstering the case for continued tight monetary policy. Recession odds were raised to 40%, casting a shadow over future oil demand and keeping risk appetite subdued across commodity markets.
OPEC+ Fractures Deepen as Output Talks Heat Up
OPEC+ discord added another bearish layer. While the group plans to lift output by 411,000 barrels per day in May, reports surfaced that some members, led by Saudi Arabia, are pushing for faster increases. Internal tensions—especially with Kazakhstan and Iraq exceeding quotas—raise doubts about OPEC+’s ability to cap supply effectively, which could accelerate the supply surplus narrative if divisions widen.
