Crude oil prices dropped 0.23% to close at ₹5,203 amid rising concerns of oversupply. The drop came after reports that OPEC+ may boost oil production in July beyond the previously agreed 411,000 barrels per day (bpd). Kazakhstan’s refusal to cut production further added to the uncertainty, sparking internal disagreements within the group.

As of 09:59 AM on June 02, 2025, Brent Crude was trading at $64.28, up by $1.50 or 2.39%.

Geopolitical Tensions Add to Pressure

Further pressure came from renewed U.S.-China tensions after U.S. President Donald Trump accused China of breaking a recent trade deal, though he didn’t share details. This reignited fears of a possible trade conflict between the 2 major economies, unsettling oil markets already facing uncertain demand and high supply.

U.S. Inventory Data Offers Some Support

On the supply side, U.S. crude oil inventories unexpectedly dropped by 2.795 million barrels, against expectations of a 0.6 million barrel rise. Gasoline and distillate stocks also fell, indicating strong demand. However, a small build-up in Cushing, Oklahoma, storage limited any major price rebound.

IEA Raises Demand Outlook

The International Energy Agency (IEA) slightly raised its oil demand forecast for 2025 to 740,000 bpd, expecting improved economic conditions and cheaper oil to drive demand.

Read More, ATF Prices Cut by 3%, Commercial LPG Gets Cheaper by ₹24 – Relief for Airlines and Hospitality Sector. 

Conclusion

Oil markets remain cautious as OPEC+ considers larger production increases amid geopolitical uncertainty and mixed inventory data. Demand hopes may offer limited relief.

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