International oil prices fall below $60
author: Ann
2025-05-07
During the May Day holiday, international oil prices plunged sharply, and the Brent and WTI crude oil indexes once fell below the $60 mark.
According to the oil price website, at 7 pm on May 4, the price of Brent crude oil was $58.88 and the price of WTI crude oil was $55.83. After the holiday, international crude oil prices rebounded.
The sharp drop in crude oil prices this time is not accidental. During the May Day holiday (May 1-5), WTI crude oil fell by 4.1% and Brent crude oil fell by 3.6%, continuing the decline since late April.
There are also complex supply and demand factors behind the drop in oil prices. From the supply side, many oil-producing countries have frequently increased production.
On May 3, representatives of eight oil-producing countries including Saudi Arabia, Russia, and Iraq held an online meeting and decided to increase production by 411,000 barrels per day in June, which is the second consecutive month to accelerate the pace of production increase. Since March this year, these eight countries have decided to gradually increase oil production. Previously, they announced a voluntary production cut of 2.2 million barrels per day in November 2023, and the production cut was postponed several times until the end of March 2025. This increase in production is the third consecutive month of production increase after April and May, with a cumulative increase of 960,000 barrels per day in three months, equivalent to 44% of the voluntary production cut in 2023.
In addition, some OPEC+ member countries have long-term overproduction, such as Kazakhstan. Sources said that if the quota compliance of member countries does not improve, OPEC and its allies may significantly increase supply from July to October. In addition to OPEC+ members, US shale oil production remains high, and non-OPEC countries such as Brazil and Guyana are also expected to increase production.
The demand side is not optimistic, consumption expectations are stuck in a growth bottleneck, and recovery is slow. In its latest World Economic Outlook report, the International Monetary Fund lowered its global economic growth forecast for 2025 to 2.8%. The global economic growth forecast for 2026 was lowered to 3%, both lower than the previous forecast.
As a world economic power, the United States' GDP contracted by 0.3% in the first quarter, and the growth rate of consumer spending hit a new low since 2023 (1.8%). Although the EIA weekly data shows that the performance of gasoline consumption in the United States has been better than last year in recent weeks, driving a rebound in refining gross profit, the crude oil processing volume in the Chinese market continues to be lower than the same period last year, diesel consumption has fallen sharply, and the high growth of new energy sales has formed a clear substitute for refined oil consumption.
The strong expectation of increased production on the supply side and the poor consumption prospects on the demand side have led to the deterioration of the oversupply situation in the crude oil market.
OPEC+'s decision to accelerate production has caused oil prices to hit the low point of the year caused by the tariff war initiated by Trump again, and has impacted oil prices from both the supply and demand sides, causing a sharp drop in international crude oil prices.
After the sharp drop in oil prices, major Wall Street investment banks have lowered their oil price forecasts.
Goldman Sachs expects the average price of Brent crude oil to be US$60 per barrel in 2025 and US$56 per barrel in 2026; WTI is US$56 and US$52 respectively, both lower than previously expected. JPMorgan Chase lowered its WTI oil price forecast to $62/barrel in 2025 and $54/barrel in 2026. Morgan Stanley lowered its forecast by a larger margin, and ING Groep also lowered its oil price outlook. Morgan Stanley expects that the daily oversupply of crude oil will reach 1.1 million barrels in the second half of this year, and the crude oil market will face the risk of oversupply in 2025.
The international crude oil market is full of various uncertainties, but if the supply-side production increase trend continues, it will be difficult to boost demand quickly, and oil prices may continue to be under pressure.
According to the oil price website, at 7 pm on May 4, the price of Brent crude oil was $58.88 and the price of WTI crude oil was $55.83. After the holiday, international crude oil prices rebounded.
The sharp drop in crude oil prices this time is not accidental. During the May Day holiday (May 1-5), WTI crude oil fell by 4.1% and Brent crude oil fell by 3.6%, continuing the decline since late April.
There are also complex supply and demand factors behind the drop in oil prices. From the supply side, many oil-producing countries have frequently increased production.
On May 3, representatives of eight oil-producing countries including Saudi Arabia, Russia, and Iraq held an online meeting and decided to increase production by 411,000 barrels per day in June, which is the second consecutive month to accelerate the pace of production increase. Since March this year, these eight countries have decided to gradually increase oil production. Previously, they announced a voluntary production cut of 2.2 million barrels per day in November 2023, and the production cut was postponed several times until the end of March 2025. This increase in production is the third consecutive month of production increase after April and May, with a cumulative increase of 960,000 barrels per day in three months, equivalent to 44% of the voluntary production cut in 2023.
In addition, some OPEC+ member countries have long-term overproduction, such as Kazakhstan. Sources said that if the quota compliance of member countries does not improve, OPEC and its allies may significantly increase supply from July to October. In addition to OPEC+ members, US shale oil production remains high, and non-OPEC countries such as Brazil and Guyana are also expected to increase production.
The demand side is not optimistic, consumption expectations are stuck in a growth bottleneck, and recovery is slow. In its latest World Economic Outlook report, the International Monetary Fund lowered its global economic growth forecast for 2025 to 2.8%. The global economic growth forecast for 2026 was lowered to 3%, both lower than the previous forecast.
As a world economic power, the United States' GDP contracted by 0.3% in the first quarter, and the growth rate of consumer spending hit a new low since 2023 (1.8%). Although the EIA weekly data shows that the performance of gasoline consumption in the United States has been better than last year in recent weeks, driving a rebound in refining gross profit, the crude oil processing volume in the Chinese market continues to be lower than the same period last year, diesel consumption has fallen sharply, and the high growth of new energy sales has formed a clear substitute for refined oil consumption.
The strong expectation of increased production on the supply side and the poor consumption prospects on the demand side have led to the deterioration of the oversupply situation in the crude oil market.
OPEC+'s decision to accelerate production has caused oil prices to hit the low point of the year caused by the tariff war initiated by Trump again, and has impacted oil prices from both the supply and demand sides, causing a sharp drop in international crude oil prices.
After the sharp drop in oil prices, major Wall Street investment banks have lowered their oil price forecasts.
Goldman Sachs expects the average price of Brent crude oil to be US$60 per barrel in 2025 and US$56 per barrel in 2026; WTI is US$56 and US$52 respectively, both lower than previously expected. JPMorgan Chase lowered its WTI oil price forecast to $62/barrel in 2025 and $54/barrel in 2026. Morgan Stanley lowered its forecast by a larger margin, and ING Groep also lowered its oil price outlook. Morgan Stanley expects that the daily oversupply of crude oil will reach 1.1 million barrels in the second half of this year, and the crude oil market will face the risk of oversupply in 2025.
The international crude oil market is full of various uncertainties, but if the supply-side production increase trend continues, it will be difficult to boost demand quickly, and oil prices may continue to be under pressure.
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