Oil prices fell for a third straight session on Wednesday, weighed down by concerns over an increase in output from major oil producers and the potential economic slowdown triggered by United States tariffs.
As of 3:30 pm AEDT (4:30 am GMT), Brent futures were down by $0.26 or 0.4% to trade at four-month lows of US$70.78 per barrel, while U.S. West Texas Intermediate (WTI) crude saw a decline of $0.61 or 0.9% to three-month lows of $67.65 per barrel.
ANZ analysts noted growing uncertainty around U.S. trade and foreign policies, which have added further volatility to the oil market. "Reports also indicate that as much as 30% of oil exports from a major Kazakh pipeline to the Black Sea could be halted after a Ukrainian drone attack on a Russian pumping station," the analysts said.
Traders are also keeping a close eye on Iraq’s potential return to the market, with several hundred thousand barrels per day of Iraqi crude expected to flow again via Kurdistan.
OPEC+ - a group of oil-producing nations, including Russia - announced on Monday that it would raise output by 138,000 barrels per day starting in April, the first increase since 2022.
This move is part of a broader plan to unwind nearly 6 million barrels per day in cuts, which represent about 6% of global demand.
Meanwhile, U.S. President Donald Trump’s administration has imposed a range of tariffs, including a 25% tariff on all imports from Mexico, a 10% tariff on Canadian energy, and a 20% tariff on Chinese goods, which came into effect on Tuesday.
On the data front, U.S. crude oil stocks fell by 1.46 million barrels for the week ending February 28, according to figures from the American Petroleum Institute. Investors are now awaiting official government data on U.S. stockpiles, expected to be released later Wednesday.
