Oil prices fell for a third day in a row on Wednesday, dropping 2.1% to $69.57 a barrel for Brent futures and 2.6% to $66.49 a barrel for US West Texas Intermediate crude.
The decline is attributed to concerns over OPEC+ plans to increase output from April, which could pressure oil prices further. The Organization of the Petroleum Exporting Countries (OPEC) and its allies will make a small increase of 138,000 barrels per day from April, with the first step in planned monthly increases aimed at unwinding nearly 6 million bpd of cuts.
The US also announced new tariffs on Canada, China, and Mexico, sparking swift retaliatory measures from each nation. Analysts warn that these trade tensions could slow economic growth and reduce fuel demand, contributing to the decline in oil prices.
“We’re seeing a slowdown in economic growth, which is affecting energy demand,” said Ashley Kelty, an analyst at Panmure Liberum. “The imposition of tariffs on China, Canada, and Mexico by the US has sparked swift reprisals from each nation, increasing concerns over a slowdown in economic growth and its impact on energy demand.”
Meanwhile, OPEC+ reiterates that it will only bring barrels back to the market if the market can absorb them. Analysts at Morgan Stanley Research suggest that OPEC+ may deliver only a few monthly increases, rather than fully unwind the cuts.
The US also announced the end of a license granted to Chevron to operate in Venezuela and export its oil, putting 200,000 bpd of supply at risk.
Source: https://www.reuters.com/markets/commodities/oil-falls-opec-plans-raise-output-us-tariffs-hammer-sentiment-2025-03-05