Oil Prices Dip as OPEC+ Quota Plan, China Demand Concerns Weigh

Global oil benchmarks edged lower on Thursday, pressured by expectations of rising OPEC+ supply and signs of weakening demand in China, a key consumer. West Texas Intermediate (WTI) crude for June delivery traded at $100.67 per barrel, down 35 cents or 0.35%, according to midday data. The international benchmark Brent crude fell 99 cents to $104.64 per barrel, a drop of 0.94%. North Dakota's Bakken crude differential held at a discount of $3.42 per barrel versus WTI.

Delegates from key OPEC+ member countries indicated the producer group aims to continue a series of planned oil output quota increases over the coming months, according to a report from Rigzone. This planned supply growth from the world's leading oil cartel is applying downward pressure on prices.

Simultaneously, new forecasts point to a significant slowdown in Chinese oil demand. China's gasoline consumption could plunge by 5.5% in 2026 compared to 2025, according to consultancy GL Consulting, as reported by OilPrice.com. The International Energy Agency (IEA) projects China's overall oil demand growth will slow to just 50,000 barrels per day this year, a sharp deceleration from 220,000 bpd in 2025. The agency attributes the Q2 slump to soaring pump prices—up around 30% since the start of the Iran conflict—which are discouraging driving.

In contrast to the oil market, natural gas prices saw modest gains, with the front-month contract rising 2 cents to $2.89 per MMBtu.

Separately, a major development in global gas supply emerged as Chinese state giant Sinopec announced the opening of a major ultra-deep shale gas field. According to OilPrice.com, the Ministry of Natural Resources approved proven geological reserves of 235.687 billion cubic meters at the Ziyang Dongfeng field in Sichuan province. Sinopec described it as China's first ultra-deep, 100-billion-cubic-meter-level shale gas field, developed with proprietary technology for formations between 4,500 and 5,200 meters deep. While this is a natural gas project, it underscores China's intense focus on boosting domestic hydrocarbon production to enhance energy security.

For Bakken operators, the steady but slightly softer oil price environment, with WTI holding above $100, continues to support active drilling and completion programs. The stable Bakken differential, currently near a $3.42 discount to WTI, provides predictable netback pricing. However, the twin market signals—rising OPEC+ supply and faltering demand growth in a major consuming nation—warrant close monitoring as they could establish a ceiling for future price gains. The significant Chinese shale gas discovery also highlights the long-term global competition in hydrocarbon development, even as it does not directly impact near-term oil flows.