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2mo ago

Oil Prices Drop as OPEC+ Boosts Output and U.S. Tariffs Take Effect

Global oil markets react to OPEC+ production increase and new U.S. tariffs on Canada, Mexico, and China, raising concerns over economic slowdown and fuel demand.

A crude oil tanker sails in Nakhodka Bay near the port city of Nakhodka, Russia, December 4, 2022. REUTERS/Tatiana Meel/File Photo
A Sheetz customer gets gasoline at a gas station in Plains, Pennsylvania, U.S. October 19, 2022. REUTERS/Aimee Dilger/File Photo
A worker walks past oil pipes at a refinery in Wuhan, Hubei province March 23, 2012. REUTERS/Stringer//File Photo
A pump jack drills oil crude from the Yates Oilfield in West Texas’s Permian Basin near Iraan, Texas, U.S., March 17, 2023. Picture taken through glass. REUTERS/Bing Guan/File photo

Overview

  • OPEC+ announced its first production increase since 2022, starting with 138,000 barrels per day in April, with plans for gradual monthly hikes.
  • U.S. tariffs of 25% on imports from Canada and Mexico, and increased duties on Chinese goods, have raised concerns about economic growth and energy demand.
  • Oil prices hit multi-month lows, with Brent crude dipping below $70 per barrel and U.S. West Texas Intermediate (WTI) trading near $67 per barrel.
  • Analysts predict U.S. retail gasoline prices could rise by $0.20 to $0.40 per gallon in regions heavily reliant on Canadian and Mexican imports, such as the Northeast.
  • The combination of increased oil supply and trade tensions has led to bearish sentiment in the market, with potential downside risks to global oil price forecasts.