The price of oil decreased throughout three continuous market days due to both U.S. trade barrier doubts and the major producers' intention to enhance their fuel generation rates. Brent crude futures declined to US$70.89 per barrel during the same period when U.S. West Texas Intermediate (WTI) futures reached US$67.86 per barrel. The market showed weakening sentiment because U.S. tariffs threatened to slow global economic development and fuel demand growth in Canada, Mexico, and China.
OPEC, Russia, and other allies declared their plan to raise oil production volumes starting in April. This marks the first time since 2022 that OPEC has decided to increase production to 138,000 barrels daily. OPEC and its allies made this announcement following the completion of their 6 million barrels per day production reduction enacted to control oil prices worldwide. The markets may face more adverse conditions due to the raised oil supply because analysts warn about the impact on existing market challenges.
Citi analysts believe that rising supply from the United States will harm oil pricing as U.S. economic indicators indicate declining performance. Market participants now doubt oil price stability because additional supply coincides with weakening economic indicators and creates market uncertainties about brief price drops.
Economic growth worries have emerged due to U.S. tariffs, which imposed 25% tariffs on Mexican imports and 10% tariffs on Canadian energy on Tuesday. The tariff collection demonstrates how the United States plans to control its relations with important oil suppliers. The U.S. actions imposed taxes on Chinese imports, making it harder for future economic prospects to develop.
According to economic standards, the implemented policies represent negative aspects that diminish worldwide financial operations. Intensified oil consumption during economic operations exceeds the amount primary oil-consuming countries require. The market expects oil prices to decline because of how economic tariffs create their effects in the upcoming period.
The newly imposed tariffs, which will take effect in the following weeks, will raise U.S. retail gasoline prices. Research analysis indicates energy prices will rise when import costs increase because businesses will shift these expenses onto their customers. The American Petroleum Institute showed that U.S. crude oil stockpiles decreased by 1.46 million barrels throughout the week that ended February 28.
Nations observe the official government data describing U.S. stockpile levels because this information gives vital insights into the U.S. oil market condition. Energy producers in the United States currently expect challenges because market conditions are worsening for expansion.