Oil prices fell for the fourth consecutive day following OPEC+’s decision to increase production, adding more supply to an already uncertain market. This drop was further fueled by Trump’s tariff policies and rising U.S. crude inventories, leading to sharp declines in oil stocks.
By Thursday afternoon, Brent crude had fallen 0.5% to $68.95 per barrel, marking its lowest level in over a year, while WTI crude dropped 0.7% to $65.86 per barrel. The U.S. Energy Information Administration (EIA) reported that crude inventories increased by 3.6 million barrels, far exceeding analysts’ expectations of a 341,000-barrel rise.
Oil Stocks Take a Hit
The market downturn affected major oil companies, with Exxon Mobil (XOM) falling 5.2%, Chevron (CVX) down 5.4%, Occidental Petroleum (OXY) sliding 8%, Marathon Petroleum (MPC) dropping 9.6%, and Devon Energy (DVN) losing 7.7%. Meanwhile, the Energy Select Sector SPDR Fund (XLE), a key oil and gas benchmark, dropped 6.6% over the past week.
Investors reacted negatively to the OPEC+ decision, which saw eight member countries—including Saudi Arabia, Russia, and the UAE—agreeing to phase out their production cuts. While OPEC+ stated that adjustments would be gradual and reversible, traders remain cautious about a potential oversupply.
Chevron Ends Venezuela Operations
Separately, Chevron received a 30-day notice from the Trump administration to halt operations in Venezuela. Since 2022, Chevron had been the only major oil producer allowed to operate there despite U.S. sanctions. This decision forces the company to withdraw from a key oil-producing region, potentially reshaping crude supply dynamics.
While Chevron faces short-term setbacks, the company remains optimistic about growth in the U.S. Gulf of Mexico and Kazakhstan. Chevron has projected oil production from the Gulf of Mexico to reach 300,000 barrels per day by 2026, up from 200,000 in 2024.
Market Outlook: Uncertainty Remains
Despite robust demand forecasts, analysts predict that oil prices will struggle in the near term due to rising supply and weaker global economic conditions. The OPEC+ production increase, combined with U.S. tariffs, may create market volatility, keeping investors on edge.
With energy policies shifting and geopolitical risks rising, traders will be closely watching future OPEC+ decisions, U.S. trade policies, and Federal Reserve interest rate moves to assess the long-term direction of oil markets.
