DTN Oil Update
Oil Futures Rise Despite Ample Supply Outlook and US GDP Contraction
HOUSTON (DTN) -- Oil futures reversed Thursday morning losses despite expectations of abundant supplies, as OPEC+ countries are scheduled to increase output in May, amid concerns about a potential recession in the United States.
Crude oil futures contracts rebounded after NYMEX WTI was traded below the $57 bbl mark and ICE Brent traded at $59.30 bbl early morning.
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Eight OPEC+ countries are expected to accelerate crude oil production increases by 411,000 bpd in May, in addition to the 2.2 million bpd released in early April.
The abundant supplies are expected to put pressure in oil futures markets as weak global demand continue, mainly from China, due to the impact of trade tariffs.
Additionally, concerns about the contraction of the U.S. economy are expected to set the bearish tone in the oil futures market in the short term.
Real gross domestic product (GDP) dropped at an annual rate of 0.3% in the first quarter of 2025, below the 2.4% increase reported in the fourth quarter of last year, according to the advance estimate released on Wednesday, April 30, by the U.S. Bureau of Economic Analysis.
BEA cited an increase in imports -- likely tied in part to companies filling inventories ahead of anticipated tariffs -- and a decrease in government spending as the main drivers of GDP contraction.
Growth estimates have been revised sharply downward because of new U.S. trade policies, especially those concerning high import tariffs on Chinese goods.
The front-month NYMEX for June delivery rose by $0.42 bbl to $58.63 bbl, and ICE Brent for July delivery rose $0.38 bbl to $61.44 bbl.
June RBOB gasoline futures edged up by $0.0184 to $2.0361 gallon, while the front-month ULSD futures contract rose by $0.0102 to $2.0120 gallon.
The U.S. Dollar Index strengthened by 0.575 points to 99.845.
