Oil Markets Suffer Steepest Monthly Loss in Years as Trade War and Supply Glut Bite

Oil prices have suffered their sharpest monthly drop in years, with Brent crude falling more than 16% since January and WTI losing 16% in April alone.

As of early April 30, 2025, Brent hovered just above $62, while WTI traded near $59.66, both marking multi-week lows. These declines, confirmed by Trading Economics and price charts, reflect a market under heavy pressure from both demand and supply sides.

The immediate catalyst for this rout came from renewed U.S.-China trade hostilities. President Trump’s April 2 tariff announcement triggered swift retaliation from China, reigniting a trade war between the world’s two largest oil consumers.

This escalation has darkened the outlook for global economic growth and, by extension, energy demand. The International Energy Agency (IEA) has revised its 2025 global oil demand growth forecast down to 730,000 barrels per day, a significant cut from previous estimates.

The agency cited the trade conflict’s impact on business confidence and industrial activity as key reasons for the downgrade. On the supply side, the market faces a glut.

OPEC+ announced it would accelerate the unwinding of voluntary production cuts, with a planned 411,000 barrel per day increase in May. However, actual supply may rise less, as some members, notably Kazakhstan, already exceed their quotas.

Kazakh output hit a record 1.8 million barrels per day following a major project expansion, placing the country nearly 400,000 barrels per day above its OPEC+ target.

Meanwhile, U.S. crude inventories surged by 3.8 million barrels last week, according to API data, well above expectations and further fueling oversupply concerns.

Crude Oil Outlook

Technical indicators reinforce the bearish sentiment. The attached Brent chart shows a persistent downtrend, with prices trading below key moving averages. WTI’s technicals confirm this weakness, as both the 100 and 200 simple moving averages now act as dynamic resistance.

Momentum indicators like the stochastic oscillator and RSI remain deep in oversold territory, suggesting that sellers still control the market. Support levels for WTI sit at $59.19 and $58.22, with resistance now at $60.35.

Investor sentiment has shifted sharply. ETF flows show net outflows from commodity funds, and futures volumes have spiked as traders reposition for further declines.

U.S. consumer confidence has fallen to a five-year low, and China’s factory output shrank at its fastest pace in over a year, both signs of weakening underlying demand. Barclays recently lowered its Brent forecast by $4 to $70 for 2025.

It warned that fundamentals remain rocky and the market faces a turbulent path ahead. The bank noted that while spot demand has held up, it was likely propped up by pre-tariff stockpiling, an effect now fading.

As April closes, oil markets confront a perfect storm of weakening demand, rising supply, and deepening trade disputes. With OPEC+ set to boost output and no resolution in sight for the trade war, prices look set for continued volatility and further downside risk.

Related coverage: Gold Retreats as Trade Tensions Ease and Dollar Firms · Brazilian Real Holds Firm as High Rates and Trade Surplus Steady the Market · Copper’s Slide Exposes Market’s Uneasy Balance as Trade Tensions Bite · Silver Holds Firm Below $33 as Supply Squeeze and Industrial Demand Shape Market

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