The United States Oil Fund LP (USO), an exchange-traded fund tracking crude oil prices, plummeted 7.76% in intraday trading on Thursday. This sharp decline comes in response to OPEC+'s unexpected decision to increase oil output and growing concerns over a potential global trade war.

OPEC and its allies, including Russia, announced plans to accelerate oil production in May, increasing output by 411,000 barrels per day. This larger-than-expected hike, equivalent to three monthly increments, caught the market off guard. The decision was based on what OPEC+ described as "healthy market fundamentals" and a "positive market outlook." However, the news sent shockwaves through the oil market, with West Texas Intermediate (WTI) crude oil futures plunging by 6.6% to $66.96 per barrel, directly impacting USO's performance.

Adding to the downward pressure, U.S. President Trump's announcement of new tariffs intensified fears of a global trade war. These concerns, coupled with a broader market selloff, further dampened the outlook for oil demand. The energy sector as a whole saw significant declines, with the Energy Select Sector SPDR Fund (XLE) down 4.8% in pre-market trading. The combination of increased supply expectations and potential demand destruction due to trade tensions has created a perfect storm for oil prices and related securities like USO.