Reuters: oil falls for the third consecutive day due to the increase in OPEC+ production and Trump’s tariffs

Oil prices fall per third session on Wednesday, since investors worried about OPEC+ plans to proceed with production increases in April and the tariffs of US President Donald Trump, Canada, China and Mexico intensified commercial tensions.

By Reuters

During the morning Boreal, the Brent’s futures fell 45 cents, or 0.63%, at $ 70.59 a barrel, while the American crude West Texas Intermediate (WTI) dropped 74 cents, or 1.08%, at $ 67.52 a barrel.

In the previous session, the contracts closed near minimums of several months, weighed with the expectations that US tariffs and counterclaces of affected countries will decelerate economic growth and reduce the demand for fuel.

«The imposition of tariffs on China, Canada and Mexico by the United States caused rapid reprisals from each nation, which increased concerns about a slowdown in economic growth and the consequent impact on energy demand,» said Ashley Kelty, an analyst at Panmure Liberum, to Reuters.

Canada and China immediately responded to Trump’s tariffs on Tuesday, and Mexican president, Claudia Sheinbaum, said the country would respond, without giving details.

Production increase in OPEC

Meanwhile, the organization of oil exporting countries and its allies, including Russia, a group known as OPEC+, decided on Monday to increase production for the first time since 2022, further pressing crude oil prices.

The group will make a small increase of 138,000 barrels per day from April, the first step of the planned monthly increases to undo its cuts of almost 6 million BPD, equivalent to almost 6% of world demand.

«There is some concern in the market that the OPEC+ decision is the beginning of a series of new monthly additions to the supply, but the OPEC+ statement reiterates an approach to recover barrels only if the market can absorb them,» said Ubs Giovanni Stauno analyst.

Morgan Stanley Research analysts said it was possible for OPEC+ to only apply a few monthly increases, rather than completely undo the cuts.

The Trump administration also said Tuesday that it would end a license that the United States had granted the American oil producer Chevron since 2022 to operate in Venezuela and export its oil. The decision puts at risk a supply of 200,000 BPD, they wrote the Raw Matters of ING in a note on Wednesday.

Meanwhile, oil stocks in the United States fell 1.46 million barrels in the week that ended on February 28, market sources said, citing figures from the American Petroleum Institute on Tuesday. Investors expect government data on US reserves, which will be published on Wednesday.