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Oil prices fell for a third session on Wednesday as plans by major producers to raise output in April combined with concerns that US tariffs on Canada, Mexico and China will slow economic growth and hit fuel demand.
Read-Oil prices set for third straight weekly gain on supply concerns
Brent futures fell 24 cents, or 0.3 per cent, to $70.80 a barrel at 0500 GMT. US West Texas Intermediate (WTI) crude CLc1 slipped 58 cents, or 0.9 per cent, to $67.68 a barrel.
In the previous session, the contracts settled at close to multi-month lows.
“Unfavourable supply-demand dynamics have created a double whammy, with tariff uncertainties posing downside risks to global growth, and in turn, oil demand,” said Yeap Jun Rong, market strategist at IG.
“OPEC+ remains on track to increase production in April, while optimism over a potential resolution to the Ukraine-Russia conflict raises the prospects of Russian supplies returning to the market,” Yeap added.
The Organization of the Petroleum Exporting Countries and its allies including Russia, a group known as OPEC+, decided on Monday to increase output for the first time since 2022.
The group will make a small increase of 138,000 barrels per day from April, the first step in planned monthly increases to unwind its nearly 6 million bpd of cuts, equal to nearly 6 per cent of global demand.
A 25 per cent tariff on all imports from Mexico, a 10 per cent tariff on Canadian energy and a doubling of duties on Chinese goods to 20 per cent came into effect on Tuesday. The Trump administration also imposed 25 per cent tariffs on all other Canadian imports.
US President Donald Trump’s self-declared trade war is seen by economists as a recipe for fewer jobs, slower growth, and higher prices, which could kill demand. The lower economic growth will likely impact fuel consumption in the world’s biggest oil consumer.
The Trump administration also said on Tuesday it was ending a license that the US has granted to US oil producer Chevron since 2022 to operate in Venezuela and export its oil.
The move puts 200,000 barrels per day of supply at risk, said ING commodities strategists in a note on Wednesday.
“This will leave US refiners looking for alternative heavy grades of crude oil just as other suppliers – Canada and Mexico – face tariffs,” they added.
Meanwhile, US crude stocks fell by 1.46 million barrels in the week ended February 28, market sources said, citing American Petroleum Institute figures on Tuesday. Investors now await government data on US stockpiles, due on Wednesday.
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