Oil Prices Slide as China Reports Deflation Amid OPEC+ Production Hike Plans

Oil prices fell in Asian trade Monday as weak inflation data from China deepened concerns about slowing global demand.

WTI crude dropped to $66.48, down 0.4%, while Brent crude fell 0.4% to $70.10 a barrel by 02:48 GMT. Both benchmarks continue their losing streak, marking seven consecutive weeks of decline.

Chinese consumer inflation dropped below zero for the first time in 13 months over the weekend. Persistent deflationary pressures in the world’s largest crude importer signal weak domestic demand.

This economic data underscores China‘s struggle to boost consumption despite recent stimulus pledges. OPEC+ confirmed last week that eight member countries will proceed with planned production increases starting April.

The group will add approximately 138,000 barrels per day each month, marking their first output increase since 2022. Production cuts totaling 2.2 million barrels daily will gradually unwind through September 2026.

Alexander Novak, Russia’s Deputy Prime Minister, emphasized the group could reverse course after April if market conditions deteriorate. Kazakhstan also announced it would reduce output for March through May despite previously exceeding its OPEC+ limits.

Oil Market Faces Pressure Amid Trade Tensions

Global trade tensions further compound oil market weakness. President Trump’s tariffs on Canada, Mexico, and China have created significant uncertainty. Market analysts from Investing.com note these factors combined with signs of cooling U.S. economic activity have pushed prices lower.

The gradual OPEC+ production increase appears to acknowledge changing market fundamentals. JP Morgan analysts previously predicted the alliance would maintain production cuts throughout 2025 and into 2026.

Industry experts now forecast Brent crude will average $74 per barrel in 2025 before falling to $66 per barrel in 2026. Traders will closely monitor additional economic data from China this week.

Beijing has vowed increased fiscal spending but provided few specifics on planned economic stimulus measures. The market continues to wait for concrete actions that might boost Chinese oil demand.

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