Global oil prices fell in European trade on Wednesday on track for the fourth profit in a row, with US crude trading near four-month lows, while Brent traded near six-month lows as the global trade war erupted, threatening global growth and fuel demand.
Recent initial data showed US crude stocks fell for the second straight week with traders now waiting for the official EIA report later today.
Prices
US crude fell 1.6% today to $66.94 a barrel, with a session-high at $68.06.
Brent fell 1.45% today to $70.04 a barrel, with a session-high at $71.19.
On Tuesday, US crude lost 0.6%, the third loss in a row, while marking a four-month low at $66.80, as Brent dropped 0.5%, hitting six-month lows at $69.79.
The Global Trade War
US President Donald Trump implemented 25% tariffs on Canada and Mexico, and doubled the additional tariffs on Chinese imports to 20%.
In response, China imposed 10-15% tariffs on some US imports starting March 10, while China imposed 25% imports on a variety of US products, with Mexico expected to follow soon.
Trump once again threatened to impose reciprocal tariffs on many of the world’s countries dependent on their tariffs on US products, thus raising concerns about inflation and growth in the US.
OPEC+
OPEC+ decided on Monday to go ahead with a scheduled production hike amounting to 138 thousand bpd in April, the first such hike since 2022.
It was a surprising decision to the markets, and is likely linked to Donald Trump’s calls for a reduction in oil prices worldwide.
US Stocks
Initial data from the American Petroleum Institute showed a drawdown of 1.5 million barrels in US crude stocks last week, the second in a row, passing estimates of a 0.3 million barrels drop.
Now traders await official data from the Energy Information Administration, still expected to show an inventory drawdown of 0.6 million barrels.
