Crude oil prices have taken a hit in recent weeks amid concerns over global economic growth prospects, just as U.S. production is on track to reach record levels and as recent data points to swelling domestic stockpiles, leaving the market to navigate “rising supply and demand uncertainties,” according to analysts.

West Texas Intermediate (WTI) futures on the New York Mercantile Exchange (Nymex) have lost around 20% of their value since late April. After trading above $66/bbl as recently as April 25, the Nymex July contract was trading just under $53/bbl Thursday afternoon.

“The oil sell-off has been swift but is consistent with the heightened price volatility on display since late April, driven by high and rising supply and demand uncertainties,” a team of Goldman Sachs analysts wrote in a recent research note. “We see four catalysts to the move lower, from the increase in trade tensions and disappointing macro readings to the ongoing increase in U.S. oil production and inventories,” as well as technical factors.

U.S. trade tensions with Beijing have fed fears of a global economic slowdown.

“Recent economic data has come in below our economists’ and consensus expectations across regions just as expectations were finally normalizing from the last violent growth scare late last year,” the Goldman Sachs analysts observed. “On a stand-alone basis, our economists estimate that the next leg in U.S.-China trade tariffs could cut global GDP growth by 0.3% over the next three years, yet risks are skewed to even more downside if China retaliates, tariffs with additional countries are levied and consumer confidence is hit by rising uncertainty.”

This comes as U.S. oil production has been accelerating and is on track to set new records this year, according to Rystad Energy. The firm said Thursday it’s raising its forecast for U.S. crude output to 13.4 million b/d by December, with May 2019 output projected to average 12.5 million b/d, both numbers that would set new all-time highs.

“Our U.S. supply projections have been revised up yet again. U.S. oil production is already higher than many in the market believe,” Rystad’s Bjornar Tonhaugen, head of oil market research, said.

According to Rystad, preliminary U.S. well production data indicates that tight oil production reached pre-winter levels of around 8.5 million b/d in May, raising the firm’s 2019 U.S. total production exit rate by around 200,000 b/d to 13.4 million b/d.

“Strong growth persists in the Permian Basin on both the New Mexico and the Texas sides,” Tonhaugen said. “Updated production estimates suggest that the Permian Basin surpassed 4.5 million b/d in May. Considering the ongoing recovery in fracking activity, Rystad Energy maintains its previous expectation that Texas production will exceed 5 million b/d at some point during the second quarter of 2019.”

Meanwhile, it was “another ugly week” for crude this week following a “disappointing” Energy Information Administration inventory report that showed stockpiles increasing by 6.8 million bbl, “counter to expectations of a 2.0 million bbl draw,” according to analysts with Tudor, Pickering, Holt & Co. (TPH).

Drivers of the larger-than-expected build were a “notable weekly ramp” in crude imports and an additional 100,000 b/d increase in estimated Lower 48 production to 12.4 million b/d, a new record, the analysts said.

“Concerning to see counter seasonal crude builds continue despite net imports down around 1.4 million b/d year/year and refiners out of maintenance mode,” the TPH team said.

Price Futures Group’s Phil Flynn, senior market analyst for the firm, called it a “massive” increase in crude supply for the week.

“Apparently based on these numbers the global economy ground to an abrupt halt last week and countries like Canada and Colombia decided to flood the U.S. shores with incredible amounts of crude oil,” Flynn said. “Crude imports shot up 1 million b/d to 7.9 million b/d. This comes as we have had a run of rising inventories, which by seasonal standards should be falling.”

Flynn pointed to economic pain caused by recent severe flooding in the Midwest and Plains regions as a possible contributing factor to the surprise inventory build.

“I would argue that these historic storms and floods may have had more impact on overall economic activity than many people thought,” Flynn said. “…We know that U.S. farmers are way behind on planting and that millions of acres of grain will go unplanted with diesel-burning tractors remaining parked.”

Outside of the United States, the core members of the Organization of Petroleum Exporting Countries (aka, OPEC), could increase production later this year to help balance the global market and offset declines in output from Iran and Venezuela, even in the face of growing U.S. production, according to Goldman Sachs.

“New U.S. pipelines out of the Permian, the cheapest and largest shale basin, will create logistical spare capacity to the rest of the world and lower the global marginal cost of production,” the analysts said, a driving factor behind the firm’s forecast for Brent prices to decline from $72.50/bbl in 2Q2019 to $65.50 in 3Q2019 and $60 in 2020.

“This spare logistical capacity also led us to forecast tighter U.S. crude differentials in 2020 relative to current market forwards (with a WTI-Brent forecast of $4.50/bbl). This finally matters to low-cost producers (core-OPEC and Russia) as it represents, in the hands of the oil majors, a multi-year threat to market share and revenues, extending for the next several years the pattern of growing low-cost production already visible since late 2014.”

Rystad is also looking for OPEC to increase production through the end of this year. The firm said it estimates OPEC crude oil output of 29.9 million b/d for May, the lowest monthly output in over five years and 2.6 million b/d below October 2018 levels. OPEC crude production for full-year 2019 is expected to total 30.3 million b/d, down 1.6 million b/d year/year, according to Rystad.

“We continue to expect OPEC production to increase through the remainder of 2019, but risks to short-term supply are undoubtedly still plentiful, with a total of 1.3 million b/d at risk from Iran, Venezuela, Libya and Nigeria,” Tonhaugen said.

The oil market finds itself in a “tug-of-war situation,” and downward price pressures have been dominating recently, Tonhaugen said.

“Downside pressures exist from weak demand and fear of economic growth degradation, partially induced from protectionist policies in the U.S. and partially from structural forces, as exemplified” by the Chinese purchasing managers’ index declining in May, Tonhaugen said.