LONDON/NEW YORK — Crude oil prices retreated Monday after two consecutive sessions of gains, with traders growing increasingly cautious over potential supply hikes by OPEC+ and a lack of clarity in U.S.-China trade negotiations. West Texas Intermediate (WTI) crude settled down 1.5% at $62.05 per barrel, while Brent crude fell equally by 1.5%, closing at $65.86.
The pullback in oil prices was driven primarily by speculation that OPEC+ may begin to unwind its coordinated production cuts sooner than anticipated. According to Razan Hilal of Forex.com, the group could accept short-term price weakness in exchange for securing longer-term strategic positioning once global trade conditions normalize.
“Market sentiment is at a crossroads,” Hilal wrote. “While a short-term dip in prices may seem risky, the potential for trade deals to unlock global growth offers longer-term upside.”
European markets echoed similar caution during afternoon trading. ING analysts highlighted the ambiguity surrounding the U.S.-China trade talks as a major overhang. “Conflicting signals from negotiators are keeping markets in a holding pattern,” they noted. Brent crude slid 1% to $65.13, while WTI dipped 0.9% to $62.42.
Investor sentiment has also been shaken by the broader implications of rising tariffs, which continue to cast a shadow over the global economic outlook and energy demand forecasts. In addition, the prospect of OPEC+ members announcing more aggressive supply increases during their June meeting is fueling bearish expectations in the short term.
Adding a layer of geopolitical tension, a large explosion at Iran’s Bandar Abbas port—situated near the strategic Strait of Hormuz—raised concerns over potential disruptions in a region responsible for a significant share of the world’s oil transit. While the immediate market reaction was muted, any escalation in the area could quickly reverse bearish sentiment.
Looking ahead, analysts suggest that any sustainable rally in oil will likely depend on two key pillars: progress in U.S.-China trade negotiations and stronger global economic data. Without these catalysts, prices may remain range-bound or under pressure from anticipated supply increases.
