Oil prices fell for the fourth consecutive session on Wednesday, settling more than 2% lower, as a larger-than-expected build in U.S. crude stockpiles, OPEC+’s planned output increase, and U.S. tariffs on Canada, China, and Mexico weighed on the market.
Prices pared some losses after U.S. Commerce Department chief Howard Lutnick suggested that President Donald Trump might grant tariff relief to certain industries, potentially eliminating the 10% duty on Canadian energy imports like crude oil and gasoline. However, the 25% tariff on Canada and Mexico would remain in place.
The decline in oil prices was driven by a 3.6-million-barrel increase in U.S. crude stockpiles last week, far exceeding analysts’ expectations of a 341,000-barrel rise, according to the Energy Information Administration (EIA). Refinery maintenance and a surge in product exports led to draws in gasoline and distillate inventories, but the crude build added to market concerns.
“The imposition of tariffs on China, Canada, and Mexico by the U.S. sparked swift reprisals from each nation, increasing concerns over a slowdown in economic growth and the consequent impact on energy demand,” said Ashley Kelty, an analyst at Panmure Liberum.
OPEC+’s decision to increase output by 138,000 barrels per day (bpd) starting in April also pressured prices. The group plans to gradually unwind its nearly 6 million bpd of cuts, though analysts believe the increases may be limited if market conditions weaken.
Additional headwinds came from the Trump administration’s decision to revoke Chevron’s license to operate in Venezuela, putting 200,000 bpd of supply at risk, and weaker-than-expected global oil demand growth in February, which rose by 1.6 million bpd year-over-year, below JP Morgan’s forecast of 1.8 million bpd.