May Crude Oil is expected to open flat to lower as demand issues continue to dominate the market as well as the debate over OPEC production issues. It is already known that demand is down in the United States and Europe, but this week’s report that China industrial production fell last month is adding to the bearishness. This news adds another piece to the supply/demand equation that may prevent OPEC from lowering production.

OPEC has no way to estimate how low demand will fall. Because of this they do not know how much production to cut. Each time they tried to cut production since the fall, they underestimated the drop in demand. Saudi Arabia is already on record saying they are not in favor with another cut until there is 100% compliance with the previous cuts. Iran, Venezuela and Russia are already in favor of a cut, but it looks like this meeting will pass without any decision being made. This should break the crude oil market hard over the near-term.