Brent crude has slid to $66 a barrel — the weakest since May — and the mood in oil markets has turned distinctly bearish. Weak US job data, a surprise build-up in American crude inventories, and growing chatter of an Opec+ output hike have combined to knock prices lower. The floor that producers had carefully defended earlier in the year suddenly looks vulnerable.
The soft US labour print was the first domino. Slower job creation underscores fading demand momentum in the world’s largest consumer economy. That was quickly followed by EIA data showing an unexpected rise in US crude stockpiles, flipping expectations of a drawdown. Layer on the steady rise in US rig counts, and the picture tilts further towards oversupply.
For Opec+, the timing could not be worse. Riyadh and Moscow face the uncomfortable prospect of rising supply elsewhere while demand remains patchy. Market sources suggest the alliance is considering another production hike at its upcoming meeting. If true, the move risks reinforcing bearish sentiment and cementing $70-plus oil as a thing of the past — at least in the near term.
The cartel is caught in a familiar bind: restrict too much and lose market share to US shale; loosen too much and risk pushing prices into the $60s for longer. But unlike in previous cycles, macro headwinds are not on its side. Demand growth has stalled, China’s recovery remains half-hearted, and the global monetary easing that could have provided a floor for risk assets has yet to fully materialize.
Traders, meanwhile, are reading the signals loud and clear. Futures positioning has thinned out, volatility has climbed, and sentiment has shifted from cautious optimism to active skepticism. The debate has moved from whether oil can reclaim $80 to whether it can hold above $65.
For Pakistan, oil’s slide provides temporary respite on the import bill and inflationary pressure. But the relief comes with the usual caveat: volatility. If Opec+ blinks in the wrong direction, the market could easily overshoot, leaving importers exposed to sharp whiplash in landed costs.
The bottom line: oil’s latest retreat is not a blip — it is the market recalibrating to weaker demand, rising inventories, and the real prospect of more supply. Unless Opec+ pulls a surprise and doubles down on restraint, the bias for oil prices is firmly to the downside. At this pace, the $60s may well become the new normal for the rest of 2025.
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