Oil prices continued their sharp decline on Friday as global markets reacted to the latest round of U.S. trade measures and a coordinated output increase from OPEC+.
Brent crude oil, against which Nigerian oil is priced, dropped by $2.29 or 3.3 percent to $67.85 a barrel while U.S. West Texas Intermediate fell by $2.32 or 3.5 percent to $64.63, one of the largest single-day declines since late 2021.
Both benchmarks are on track for their worst weekly performance in six months as traders respond to increased downside risks from tightening trade conditions and oversupply concerns.
Analysts say President Donald Trump’s sweeping tariff decision announced midweek has triggered renewed fears of slower global growth and demand contraction across key commodities.
The selloff was intensified by OPEC+ announcing a more aggressive supply ramp-up as the group confirmed it will raise output by 411,000 barrels per day in May up from the previously scheduled increase of 135,000 barrels per day.
The move adds significant volumes to the market at a time when demand projections are under pressure due to macroeconomic uncertainty.
Oil broker PVM described the current market dynamic as a return to pandemic-era trading behavior.
In a note to clients John Evans of PVM said the oil complex was forced to absorb an overwhelming wave of selling driven by weakening sentiment and rising supply.
He noted that the pace of the decline mirrored the collapse seen in early 2020 when global demand dropped rapidly due to lockdowns.
Although Trump’s tariff policy includes exemptions for crude oil gas and refined products the broader implications for global trade and inflation remain negative for the energy sector.
Market participants are concerned that tariffs on a wide range of imports and potential retaliation from trading partners could erode global economic activity and reduce industrial fuel demand.
The U.S. dollar index also dropped to 102.98 its lowest level since October further reflecting market uncertainty.
Investors have shifted capital toward safe-haven assets including bonds gold and the Japanese yen while pulling back from risk-heavy commodity positions.
Goldman Sachs revised its 2025 oil price forecasts cutting its Brent target by $5 to $66 per barrel and its WTI forecast to $62.
The bank cited elevated recession risk and increased OPEC+ supply as the key drivers behind the downgrade.
Daan Struyven head of oil research at Goldman said the balance of risks points to further downside particularly beyond 2025 unless global trade conditions stabilize.
However, Rystad Energy took a more balanced view. The firm said prices could recover later this year as geopolitical uncertainties trade restrictions and supply disruptions counteract current weakness. Mukesh Sahdev global head of commodity markets at Rystad stated that oil is unlikely to stay below $70 for long if physical markets tighten in the second half of the year.
Despite the mixed views from analysts the immediate outlook remains pressured. Traders are watching for new updates from the U.S. administration OPEC+ and key Asian importers as markets adjust to fast-moving developments in both policy and supply. Until then oil markets are expected to remain volatile with a bearish bias as global macroeconomic conditions evolve.
