Oil prices fell for the third consecutive session on Wednesday as rising output from major producers and concerns about the economic impact of U.S. tariffs on Canada, Mexico, and China dampened market sentiment and fueled fears of slower fuel demand growth.
Brent crude futures dipped 15 cents to $70.89 per barrel at 0200 GMT. On the previous day, the contract had dropped to $69.75, its lowest level since September 11, before settling at a similar low.
U.S. West Texas Intermediate (WTI) crude lost 40 cents, or 0.6%, to $67.86, after closing at its lowest since December. The price had fallen as low as $66.77 in the prior session, its lowest since November 18.
Analysts at Citi noted that the decision by OPEC+ to begin increasing production is a bearish development, particularly as U.S. macroeconomic data begins to show signs of softening. “The OPEC+ decision to raise output will loosen markets at a time when U.S. data is showing signs of weakness,” they said in a note.
OPEC+—a coalition of the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia—announced on Monday that it would raise production for the first time since 2022. Starting in April, the group will increase output by 138,000 barrels per day (bpd), marking the first of several planned monthly increases aimed at unwinding its near 6 million bpd production cuts, which accounted for nearly 6% of global demand.
Meanwhile, the U.S. trade war rhetoric continued to have an impact on market sentiment. New tariffs, including a 25% duty on all imports from Mexico, a 10% tariff on Canadian energy exports, and a 20% tariff on Chinese goods, went into effect on Tuesday. These measures sparked concerns about slower economic growth, which could dampen fuel demand. Economists worry that the trade war could lead to fewer jobs, slower economic growth, and higher prices, ultimately suppressing demand for oil.
U.S. retail gasoline prices are also expected to rise in the coming weeks, as the new tariffs increase the cost of energy imports, according to traders and analysts.
The Trump administration’s decision to revoke a license granted to U.S. oil producer Chevron in 2022, allowing it to operate in Venezuela and export oil, also added to the market’s unease.
In a more positive development, U.S. crude oil stocks fell by 1.46 million barrels in the week ending February 28, according to data from the American Petroleum Institute. Investors are now awaiting official U.S. government data on stockpiles, due to be released on Wednesday.
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