The United States Oil Fund LP (USO) experienced a steep 8.59% plunge during Friday's trading session, mirroring the dramatic fall in global oil prices. This significant downturn comes as a result of a perfect storm of bearish factors hitting the oil market, including a surprise move by major oil producers to increase supply and escalating trade tensions.

Oil prices tumbled to their lowest levels in more than three years, with both Brent and West Texas Intermediate (WTI) crude futures experiencing substantial losses. The sell-off was initially triggered by U.S. President Donald Trump's announcement of new tariffs, which have raised concerns about global economic growth and oil demand. Adding to the pressure, OPEC and its allies (OPEC+) shocked the market by announcing a larger-than-expected increase in oil production for May, tripling their planned output hike and further exacerbating oversupply fears.

In response to these developments, major financial institutions have revised their oil price forecasts downward. Goldman Sachs, for instance, has cut its Brent crude price estimate to an average of $69 per barrel from $73 previously, citing weaker global demand due to escalating trade tensions and higher OPEC+ supply. Key oil market indicators, including timespreads, are signaling looser balances ahead, suggesting that the downward pressure on oil prices – and consequently on oil-related ETFs like USO – may persist in the near term. As the market grapples with these new dynamics, investors in energy-related securities should brace for potential continued volatility.