Crude oil prices slumped on Wednesday, extending a steep slide as economic concerns mount and demand signals weaken in the face of escalating global trade tensions.
West Texas Intermediate (WTI) fell 3.66% to US$58.21 a barrel, the lowest level in more than three weeks and on track for its worst monthly performance since late 2021. Brent crude, the international benchmark, dropped 1.76% to US$63.12.
The declines follow a sharp drop in US consumer confidence and heightened fears of a global economic slowdown, with West Texas Intermediate now down more than 15% for April. The Conference Board’s index fell to 86.0, its weakest reading since April 2020, amid growing public concern about President Donald Trump’s sweeping tariffs and their inflationary and growth-dampening effects.
Traders are increasingly pricing in a surplus in the months ahead, with some WTI spreads now in contango—a market condition where future contracts trade above current prices. Morgan Stanley flagged this as a signal of expectations for a “meaningful surplus,” driven by slowing demand and rising inventories.
Supply-side pressures add to gloom
Data from the American Petroleum Institute showed a 3.8 million barrel increase in US crude inventories last week, far above the forecasted 400,000-barrel build. At the same time, expectations are rising that OPEC+ may accelerate supply hikes at its May 5 meeting, with member states such as Saudi Arabia reportedly considering a faster-than-planned production boost.
Further weighing on sentiment, geopolitical tensions have eased slightly. Talks around Iran’s nuclear program are showing signs of progress, and Russia has declared a temporary truce in Ukraine, increasing the prospect of additional oil flows returning to the global market.
With consumption expected to cool as post-tariff stockpiles begin to unwind, analysts warn the recent price declines may reflect a broader reset in oil market dynamics.
