International oil prices fall into a period of deep adjustment
author: Ann
2025-05-12
Recently, the international crude oil market has continued to be under pressure, and prices have fluctuated downward. The economic uncertainty caused by the US tariff policy, weak global demand and the "OPEC+" production increase plan have jointly led to the spread of market pessimism. Analysts believe that before multiple unfavorable factors are effectively alleviated, the weak trend of international oil prices will be difficult to reverse in the short term.
1. Prices continue to fall, and market confidence is frustrated
On May 5, local time, international crude oil futures prices continued to fall. The price of light crude oil futures for delivery in June on the New York Mercantile Exchange fell by $1.16 to close at $57.13 per barrel, a drop of 1.99%; the July contract of London Brent crude oil futures fell by $1.06 to close at $60.23 per barrel, a drop of 1.73%.
Data showed that the price of West Texas Intermediate (WTI) crude oil plummeted by 18% month-on-month in April, the largest monthly drop since 2021; the price of London Brent crude oil futures also showed a unilateral downward trend. Market panic was further amplified at the speculative level: in April, the net long position of WTI crude oil in the New York market fell to a historical low, and Brent crude oil reduced its holdings by 162,300 lots in a single week, setting a record for the largest weekly reduction; the trading volume surged by 30% during the same period, reflecting the frequent forced liquidation and deleveraging.
2. The demand side continued to be weak, and the economic outlook was worrying
The uncertainty of the US tariff policy has become the main factor suppressing market confidence. The escalating trade frictions have exacerbated the downward pressure on the global economy. The Organization of Petroleum Exporting Countries (OPEC) has lowered its forecast for global oil demand growth in 2025 to 1.3 million barrels per day, and the average daily oil demand for the whole year is expected to be about 105.1 million barrels.
The domestic economic data in the United States is also not optimistic: the number of job vacancies in March fell to 7.192 million, the consumer confidence index in April fell to a low of 86 in recent years, and gasoline demand fell by 3.5% year-on-year in that month, the largest drop in two years. Major US investment banks have even lowered their global economic growth forecasts to 2.8%, significantly lower than the long-term average of 3.2%.
3. Supply side continues to be loose, and oversupply pressure intensifies
While demand is weak, the pressure of oversupply in the global crude oil market continues to increase. The "OPEC+" organization decided to significantly increase production from the originally planned 135,000 barrels/day to 411,000 barrels/day from May, and plans to fully restore the production increase of 2.2 million barrels/day in 2026. Market forecasts show that global oil market inventories will accumulate at a rate of 600,000 to 700,000 barrels/day in the second half of 2025.
As of the week of April 25, US crude oil inventories were 440.4 million barrels, which was 2.7 million barrels less than the previous week, but still close to the 5-year average. If the export market fails to recover effectively or refinery demand continues to be sluggish, inventory pressure will be further intensified.
4. It will take time to bottom out, and multiple conditions need to be met
Analysis points out that the bottoming out of international oil prices requires multiple conditions: first, the global demand side needs to stabilize and rebound, which depends on the easing of US tariff policies and the resumption of cooperation among major economies; second, "OPEC+" needs to adjust its production increase plan in a timely manner according to market changes, and core oil-producing countries such as Saudi Arabia may stabilize prices by reducing production; third, the geopolitical situation in the Middle East needs to stabilize to ensure crude oil supply expectations; finally, inventory pressure needs to be substantially alleviated.
At the "OPEC+" meeting held in May, Saudi Arabia, Russia and other eight participating countries confirmed that they would maintain an increase in production of 411,000 barrels per day in June, and stated that they would flexibly adjust their strategies according to market changes. In the context of trade frictions and energy games, international oil prices will continue to fluctuate violently in the short term.
Experts suggest that countries should accelerate the diversification of energy imports and vigorously develop renewable energy. The international community needs to strengthen policy coordination, ease trade tensions through multilateral negotiations, and create favorable conditions for the stability of the commodity market.
1. Prices continue to fall, and market confidence is frustrated
On May 5, local time, international crude oil futures prices continued to fall. The price of light crude oil futures for delivery in June on the New York Mercantile Exchange fell by $1.16 to close at $57.13 per barrel, a drop of 1.99%; the July contract of London Brent crude oil futures fell by $1.06 to close at $60.23 per barrel, a drop of 1.73%.
Data showed that the price of West Texas Intermediate (WTI) crude oil plummeted by 18% month-on-month in April, the largest monthly drop since 2021; the price of London Brent crude oil futures also showed a unilateral downward trend. Market panic was further amplified at the speculative level: in April, the net long position of WTI crude oil in the New York market fell to a historical low, and Brent crude oil reduced its holdings by 162,300 lots in a single week, setting a record for the largest weekly reduction; the trading volume surged by 30% during the same period, reflecting the frequent forced liquidation and deleveraging.
2. The demand side continued to be weak, and the economic outlook was worrying
The uncertainty of the US tariff policy has become the main factor suppressing market confidence. The escalating trade frictions have exacerbated the downward pressure on the global economy. The Organization of Petroleum Exporting Countries (OPEC) has lowered its forecast for global oil demand growth in 2025 to 1.3 million barrels per day, and the average daily oil demand for the whole year is expected to be about 105.1 million barrels.
The domestic economic data in the United States is also not optimistic: the number of job vacancies in March fell to 7.192 million, the consumer confidence index in April fell to a low of 86 in recent years, and gasoline demand fell by 3.5% year-on-year in that month, the largest drop in two years. Major US investment banks have even lowered their global economic growth forecasts to 2.8%, significantly lower than the long-term average of 3.2%.
3. Supply side continues to be loose, and oversupply pressure intensifies
While demand is weak, the pressure of oversupply in the global crude oil market continues to increase. The "OPEC+" organization decided to significantly increase production from the originally planned 135,000 barrels/day to 411,000 barrels/day from May, and plans to fully restore the production increase of 2.2 million barrels/day in 2026. Market forecasts show that global oil market inventories will accumulate at a rate of 600,000 to 700,000 barrels/day in the second half of 2025.
As of the week of April 25, US crude oil inventories were 440.4 million barrels, which was 2.7 million barrels less than the previous week, but still close to the 5-year average. If the export market fails to recover effectively or refinery demand continues to be sluggish, inventory pressure will be further intensified.
4. It will take time to bottom out, and multiple conditions need to be met
Analysis points out that the bottoming out of international oil prices requires multiple conditions: first, the global demand side needs to stabilize and rebound, which depends on the easing of US tariff policies and the resumption of cooperation among major economies; second, "OPEC+" needs to adjust its production increase plan in a timely manner according to market changes, and core oil-producing countries such as Saudi Arabia may stabilize prices by reducing production; third, the geopolitical situation in the Middle East needs to stabilize to ensure crude oil supply expectations; finally, inventory pressure needs to be substantially alleviated.
At the "OPEC+" meeting held in May, Saudi Arabia, Russia and other eight participating countries confirmed that they would maintain an increase in production of 411,000 barrels per day in June, and stated that they would flexibly adjust their strategies according to market changes. In the context of trade frictions and energy games, international oil prices will continue to fluctuate violently in the short term.
Experts suggest that countries should accelerate the diversification of energy imports and vigorously develop renewable energy. The international community needs to strengthen policy coordination, ease trade tensions through multilateral negotiations, and create favorable conditions for the stability of the commodity market.
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