West Texas Intermediate (WTI) crude oil prices have regained their daily losses, trading around $62.20 per barrel during Thursday’s Asian trading hours. However, oil prices face challenges as investors evaluate the potential for an accelerated production increase from OPEC+ (the Organization of the Petroleum Exporting Countries and its allies).
Oil prices fell over 2% on Wednesday after Reuters reported that several OPEC+ members, including Kazakhstan, plan to propose increasing production in June. Kazakhstan, a key ally within the group, announced that it could not further cut output from its major oil fields and would prioritize national interests in its production strategy.
Despite this downward pressure, crude prices found some support from hopes of a breakthrough in U.S.-China trade negotiations. The Wall Street Journal reported that the White House may reduce tariffs on Chinese goods by up to 50% to facilitate dialogue. U.S. Treasury Secretary Scott Bessent acknowledged that current tariffs, set at 145% on Chinese goods and 125% on U.S. goods, are unsustainable and need to be lowered for meaningful talks to progress. However, National Economic Council Director Kevin Hassett warned that a comprehensive trade deal could take two to three years to finalize.
U.S. President Donald Trump emphasized that tariff reductions would depend on China’s willingness to engage in talks. “If we don’t reach a deal, we’re simply setting the price — then it’s up to them to decide if they want to proceed,” Trump said, noting that the current 145% tariff remains due to a lack of trade activity with China.
Meanwhile, market participants are keeping an eye on upcoming U.S.-Iran discussions, scheduled for the weekend, which could affect global oil supply if progress is made on limiting Iran’s uranium enrichment. However, sentiment was dampened after the U.S. imposed new sanctions on Iran’s energy sector, with Tehran accusing Washington of lacking seriousness in negotiations.
