Crude oil prices took another hit today, extending their downward trend as concerns over global trade and supply decisions weighed on the market.
At the time of writing, Brent crude was trading at $70.87 per barrel, while West Texas Intermediate (WTI) stood at $67.75 per barrel, both lower than their opening prices. Murban crude, however, saw a slight increase, reaching $71.27 per barrel.
Why Are Prices Dropping?
Several factors are contributing to the decline:
1. OPEC+ Plans to Increase Production
The Organisation of the Petroleum Exporting Countries and its allies (OPEC+) have decided to gradually increase oil production from April. This means an extra 138,000 barrels per day will hit the market, adding to the global supply.
According to analysts at Citi, this is a bearish signal, meaning it could push prices down further, especially since economic data from the United States suggests demand could soften.
2. Uncertainty Over U.S. Tariffs on Mexico and Canada
Oil traders are also keeping an eye on trade tensions. The U.S. government has introduced a 25% tariff on all Mexican imports and a 25% tariff on Canadian imports, with a discounted 10% rate on Canadian energy products.
In response, Canada has announced retaliatory tariffs worth $107 billion on American goods. Prime Minister Justin Trudeau made it clear that these tariffs will remain until the U.S. reverses its actions.
3. Impact on Fuel Prices
With trade wars heating up, experts expect fuel prices at the pump to rise. According to GasBuddy, the back-and-forth tariff battle could lead to higher fuel costs for consumers in the coming weeks.
What’s Next for Oil Prices?
As OPEC+ moves forward with its production increase and global trade tensions continue, oil prices could remain volatile. Traders and investors are watching closely to see how demand holds up, especially with economic uncertainty in the U.S.
For now, all eyes are on the next big market moves and whether prices will continue their downward slide or find support in the coming days.
