As the Organization of the Petroleum Exporting Countries and its allies (OPEC+) are about to hold a key production meeting, international oil prices have recently entered a narrow fluctuation range, with trading sentiment turning cautious. Investors are closely watching the potential easing of US-European trade relations while assessing the chain reaction of geopolitical changes in major economies on the outlook for energy demand.
Due to the closure of the London Stock Exchange and New York Mercantile Exchange for the holiday, global crude oil market trading was noticeably light on Monday, May 27th. On that day, the main contract of US crude oil futures fluctuated around $61 per barrel, ultimately closing slightly higher; the international benchmark Brent crude futures were under pressure below $65, continuing a sideways consolidation pattern.
Last week, US President Trump issued harsh criticism of EU trade policy, briefly intensifying trade tensions, but the EU quickly sent a goodwill signal, stating that it would accelerate negotiations with the US. This move provided some support to the oil market sentiment, but overall uncertainty remains high.
Since mid-January this year, international oil prices have cumulatively corrected by more than 10%. The main factors exerting pressure include: on one hand, the US government raising tariffs on multiple countries leading to intensified global trade frictions, with major economies like China taking countermeasures, and the market being generally pessimistic about the energy demand outlook; on the other hand, OPEC+ member countries gradually exiting voluntary production cut agreements, the ongoing trend of increased production coupled with weak demand expectations, causing oil prices to be under pressure.
According to informed sources, the OPEC+ joint ministerial monitoring committee (JMMC) meeting originally scheduled for June 1 has been moved up to May 31. The meeting will focus on the production quota distribution for core member countries such as Saudi Arabia and Russia in July. It is reported that the OPEC+ technical committee has started preliminary discussions on the issue of increasing production for the third consecutive month, but no consensus has yet been reached on the specific increase.
The market is currently in a sensitive phase with a mix of bullish and bearish factors. On one hand, the ongoing escalation of trade frictions could hinder global economic growth, thereby suppressing oil consumption; on the other hand, if OPEC+ signals cautious production increases or stabilizes production at the meeting, it might provide support for oil prices to establish a bottom.
Analysts point out that the market urgently needs clear policy cues from OPEC+ and major consumer countries to assess the evolution path of the global oil supply and demand pattern in the second half of the year. The coming days will become a crucial window period for choosing the direction of oil prices.
