Oil Prices Sink Below $60 as OPEC+ Ramps Up Production, Market Faces Growing Surplus
By SpringNewsNG Media Limited | May 5, 2025
Brent crude futures dropped $2.21, or 3.61%, to $59.08 per barrel by 0653 GMT—falling below the $60 threshold for the first time since April 9. U.S. West Texas Intermediate (WTI) crude slid even further, losing $2.29, or 3.93%, to $56.00 per barrel.
The price drop followed OPEC+’s decision to raise oil production by an additional 411,000 barrels per day (bpd) in June, marking the second consecutive month of accelerated output. According to Reuters calculations, the increases for April, May, and June will total 960,000 bpd—unwinding 44% of the 2.2 million bpd in voluntary cuts that the group has maintained since 2022.
“The May 3 OPEC+ decision to raise production quotas… adds to the market expectation that the global supply/demand balance is moving to a surplus,” said Tim Evans, founder of Evans on Energy, in a market note.
Sources within OPEC+ told Reuters that Saudi Arabia is driving the push to speed up the rollback of cuts, partly as a response to Iraq and Kazakhstan’s repeated failures to comply with production quotas.
Market signals are also shifting. The six-month Brent price spread flipped to contango—meaning near-term contracts are cheaper than future deliveries—for the first time since December 2023. The 11-cent spread suggests that traders now anticipate ample supply going forward.
The policy shift has prompted major financial institutions to revise their oil price forecasts. Barclays cut its 2025 Brent crude projection by $4 to $66 a barrel, and its 2026 estimate by $2 to $60. ING also revised its 2025 Brent average forecast down to $65, from $70 previously.
Barclays analyst Amarpreet Singh noted that while OPEC+ is likely to phase out its voluntary cuts by October 2025, U.S. oil production is also expected to grow at a slightly slower pace. Nonetheless, the net effect will still be a significant rise in global supply—Barclays now projects an increase of 290,000 bpd for 2025 and 110,000 bpd for 2026.
Meanwhile, ING analysts led by Warren Patterson warned that the market is entering deeper surplus territory. “The oil market has been dealing with significant demand uncertainty amid tariff risks. This change in OPEC+ policy adds to uncertainty on the supply side,” they wrote.
The growing imbalance between supply and demand is now raising concerns about longer-term price stability in a market already buffeted by economic volatility and shifting geopolitical dynamics.
