Crude oil prices extended their losing streak in early trading on Friday as a combination of weak demand expectations, increased supply forecasts, and easing geopolitical tensions weighed on the market. The declines mark what could be one of the steepest weekly drops since late June.
Demand Outlook Weakens on Tariff Worries
A key driver of the downturn was heightened concern over new U.S. tariffs, which are expected to dampen global trade and energy consumption. Traders grew increasingly cautious as these measures fueled uncertainty in major oil-importing economies, further eroding demand expectations. Some analysts warn that if tariffs remain in place into Q4, they could shave additional points off global GDP growth, compounding the pressure on crude prices.
OPEC+ to Increase Output
Adding to the bearish mood, OPEC+ announced that several member states will boost production by 547,000 barrels per day starting in September. This supply increase is seen as a headwind for prices, particularly amid already fragile consumption trends. The move also suggests that OPEC+ is prioritizing market share over price stability, which could deepen the current price slide if demand fails to rebound.
Lower Geopolitical Risk Premium
Markets also reacted to an easing of geopolitical tensions in key producing regions. Reduced supply disruption risks tend to lower the geopolitical premium embedded in oil prices, removing one of the supports that had helped keep benchmarks elevated earlier this year.
Technical Outlook
Looking at the daily chart we can see that price is trading lower for a seventh consecutive day. Price is holding below the key level of $64.29 and the series of prior lows at $59.84 represent potential support to the downside.
What’s Next for Oil Prices
Analysts expect crude prices to remain under pressure through the third quarter as a combination of soft demand, increased OPEC+ output, and tariff uncertainty continues to weigh on sentiment. While any renewed geopolitical flare-ups or unplanned supply disruptions could trigger short-term rebounds, the broader trend remains bearish.