WTI crude Oil price struggles below $61 as OPEC+ output hike looms

WTI crude oil price fell below $61 per barrel on May 23, marking its first weekly decline in three weeks. The sharp drop came after OPEC+ discussions emerged about raising crude production quotas, potentially adding 411,000 barrels per day (bpd) in July. 

Highlights

• WTI crude slips below $61 per barrel amid concerns over increased OPEC+ output.
• U.S. crude stockpiles rise unexpectedly, contributing to bearish sentiment.
• Potential disruptions from geopolitical tensions, including U.S.-Iran nuclear talks and the Ukraine war, keep traders cautious.

With concerns about an oversupply worsening, U.S. crude stockpiles unexpectedly rose earlier in the week, adding pressure on oil prices. Furthermore, rising U.S. crude storage demand has reached levels unseen since the pandemic’s early days. The markets are also monitoring geopolitical risks, including U.S.-Iran nuclear talks, and the ongoing situation in Ukraine, which could disrupt supply.

USOIL price prediction (April 2025 - May 2025) Source: TradingView.

Oil market under pressure as OPEC+ considers output increase

Crude oil prices have slipped below key trendline support after failing to hold at the $63 per barrel mark earlier in the week. Market participants are reacting to reports that OPEC+ might raise output by 411,000 bpd in July, which would add to the growing supply glut. Despite a surge in U.S. crude storage demand, the market has remained under pressure. 

Traders are also focused on Baker Hughes' weekly rig count, a crucial gauge of future U.S. oil and gas output, while potential geopolitical disruptions, including a potential Israeli strike on Iranian nuclear facilities, have raised concerns over regional supply issues.

Short-term price dynamics for WTI crude Oil

WTI crude is currently trading at $60.71, having dropped below a key trendline support that guided its recovery earlier in May. The price has also dipped beneath both the 50-EMA at $61.44 and the 200-EMA at $61.36, signaling a shift in momentum. Immediate resistance is now seen around $61.14, with the price facing pressure from sellers looking to push toward $60.08. 

A breakdown below this level could see the next support at $59.14. However, a clean break above $61.40 could invalidate the current bearish setup and suggest a move higher.

Geopolitical factors and market uncertainty

Despite the volatility in oil prices, OPEC+'s potential supply hike and geopolitical risks remain central to oil market sentiment. The potential for an additional increase in OPEC+ output combined with weakening technical indicators has kept oil prices under downward pressure. A continued focus on U.S. crude stockpile data and geopolitical developments such as U.S.-Iran nuclear talks and ongoing conflict in Ukraine will influence oil prices in the short-term.

As previously mentioned, concerns about oversupply from OPEC+ combined with rising U.S. crude stockpiles are continuing to weigh on oil prices. Geopolitical risks also remain a key factor, with traders closely watching developments in the U.S.-Iran nuclear talks and the situation in Ukraine.