Oil Prices Rebound Slightly After Sharp Drop on Saudi Supply Signals

Oil prices edged higher on Thursday following a steep decline the previous day, as investors weighed signals of potential increased output from Saudi Arabia and a weaker U.S. economic outlook. Brent crude futures rose by 16 cents, or 0.3%, to $61.22 a barrel, while U.S. West Texas Intermediate (WTI) crude gained 6 cents, or 0.1%, to $58.27. Both benchmarks had previously closed at their lowest levels in nearly four years.

Market sentiment shifted after reports emerged that Saudi Arabia has been informing allies and industry stakeholders that it does not intend to support prices through further supply cuts and is prepared to endure an extended period of low oil prices. Additionally, sources familiar with internal discussions said several OPEC+ members may propose a second consecutive monthly increase in oil output at the June meeting.

Meanwhile, concerns about weakening global demand intensified after the U.S. economy contracted for the first time in three years during the first quarter. The decline was attributed to a surge in imports, as businesses moved to avoid higher tariffs imposed under President Donald Trump’s trade policy. According to a Reuters poll, these tariffs could tip the global economy into recession this year.

Increased trade tensions between the U.S. and China, combined with OPEC+ plans to gradually unwind supply restrictions, are expected to pressure oil prices throughout 2025. A Reuters survey of 40 economists and analysts projected Brent crude to average $68.98 a barrel next year, down from the previous month’s $72.94 forecast, while WTI is expected to average $65.08, lower than the prior $69.16 estimate.

Despite demand concerns, U.S. crude stockpiles unexpectedly fell by 2.7 million barrels last week, driven by stronger exports and refinery consumption, according to the Energy Information Administration.