Crude oil stabilises after OPEC+ output shock

David Morrison

SENIOR MARKET ANALYST

08 May 2025

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Crude oil was firmer on Thursday morning. Prices managed to stabilise following yesterday’s slow but steady sell-off.

Oil started the week by gapping sharply lower. This was in response to the weekend announcement from OPEC+ that the cartel was once again increasing output by more than expected.

Daily chart of US Light Crude showing price stabilisation after sell-off

Source: TradingView

This increase was part of the continuing process to reverse production cuts that have supported prices over the last couple of years. But OPEC+ is unwinding the cuts at a much faster rate than analysts anticipated. This decision appears to be driven by Saudi Arabia which has lost patience with certain OPEC+ members who have ignored quotas.

Saudi also appears to be working with the Trump administration to keep downward pressure on the oil price. But traders should not interpret this as a clear signal to short crude. If traders decide that the market has fully priced in all the bad news available, that could set the stage for a rally and subsequent short squeeze. 


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