Crude Oil Prices Plunge as OPEC+ Increases Production

Oil prices slumped to their lowest level in over three years as OPEC+ pushed ahead with big production increases just as global demand gets weaker from rising trade tensions. 

Brent futures slid by 4.6% to $58.50 per barrel in early Monday trading, while WTI dropped nearly 5% to $55.53. Both benchmarks are now at their lowest point since February 2021. 

The bearish tone deepened after eight OPEC+ members committed to adding 411,000 barrels per day in June, bringing total output increases to 957,000 bpd. That follows back-to-back hikes in April and May and unwinds part of the 2.2 million bpd the group slashed in 2023.

The surge in supply comes at a tense time. Oil prices have already fallen more than 20% since mid-January, as US-China tensions stoke fears of a demand crunch. 

The US economy contracted in Q1, while China’s factory output hit a 16-month low, weakening the outlook for the world’s two largest oil consumers. Meanwhile, analysts note the shift from supply-led to demand-led price dynamics, with Saudi Arabia stepping back and leaving the market to absorb OPEC+'s output wave on its own.

What Does This Mean for Me?

China’s Ministry of Commerce confirmed it is weighing up a US request to reopen trade talks. Whether that will come fast enough to rescue oil prices remains unclear. For now, traders face a supply-heavy market with little demand momentum, and crude remains under pressure heading into the next OPEC+ meeting on June 1.