Oil prices extended their weekly losses on Friday on expectations of a fresh output hike by OPEC+ and renewed legal uncertainty surrounding U.S. tariffs imposed by former President Donald Trump.
Brent crude oil, against which Nigerian oil is priced, dropped by 21 cents or 0.33% to trade at $63.94 per barrel while U.S. West Texas Intermediate (WTI) crude slipped 22 cents or 0.36% to $60.72 per barrel.
The downward trend has been largely driven by the anticipation that the Organization of the Petroleum Exporting Countries and its allies (OPEC+) will approve another production increase during their scheduled meeting this Saturday.
According to market analysts, the alliance could raise output by more than the 411,000 barrels per day agreed upon in previous meetings.
“The stage is set for another bumper production increase,” said Robert Rennie, Head of Commodity and Carbon Research at Westpac, in a client note.
Analysts at JPMorgan echoed this sentiment, citing a widening global surplus estimated at 2.2 million barrels per day, which may necessitate a downward price adjustment to rebalance the market.
JPMorgan forecasts that crude prices will remain within current levels in the short term but could ease into the high $50s by the end of the year as supply pressures mount.
In the U.S., oil markets reacted to a federal appeals court decision on Thursday that temporarily reinstated sweeping tariffs introduced by Donald Trump.
The ruling reversed a lower trade court’s decision to immediately block the tariffs, which had led to a brief sell-off in crude futures earlier in the week.
The tariffs, first announced on April 2 as part of Trump’s “Liberation Day” trade campaign, have contributed to a more than 10% decline in oil prices over the past two months.
Analysts say the legal back-and-forth is likely to prolong trade uncertainty and suppress investor sentiment in energy markets.
The escalating tariff dispute between the U.S. and China has also cast a shadow on global oil demand. Washington recently ordered multiple companies to halt shipments of ethane, butane, and other petroleum-based products to China without a license, further straining trade flows.
Licenses previously granted to some suppliers have been revoked.
Despite these headwinds, U.S. oil demand showed signs of recovery over the Memorial Day weekend, driven by robust domestic travel activity.
JPMorgan analysts noted that global demand improved marginally from the previous week, but the overall pace of expansion remains subdued.
As of May 28, the monthly growth rate in global oil demand was tracking at 400,000 barrels per day — significantly below the expected 650,000 bpd.
With Brent July futures expiring today and a critical OPEC+ decision pending, markets are likely to remain volatile.
Analysts caution that while surface-level consumption has improved, structural oversupply and policy risks continue to weigh on the outlook.
