Due to the growing uncertainty caused by the threats of introduced tariffs from Washington and the slowdowns in the U.S. economy, the risk of oil supply has increased. Active futures contracts for May for Brent crude oil fell by 31 cents, or 0.4%, to $73.26 per barrel, at 01:33 GMT, while West Texas Intermediate (WTI) oil prices dropped by 30 cents, or 0.4%, to $70.05 per barrel.
"The only counter argument is that prices have already fallen significantly," Sycamore stated, adding that WTI prices are technically supported at levels between $65 and $70 per barrel. Increasing pressure on the market, U.S. President Donald Trump confirmed on Thursday that his proposed 25% tariffs on goods from Mexico and Canada will take effect on March 4, along with the additional 10% tariffs on Chinese imports.
Additionally, data on the U.S. economy showed that the number of jobless claims rose more than expected last week, while another report from the government confirmed the slowdown in economic growth in the fourth quarter. Nevertheless, oil prices rose more than 2% on Thursday after Trump lifted a license previously granted to a major American oil company Chevron to operate in Venezuela.
This move triggered concerns regarding supply shortages and could lead to new negotiations between Chevron and the Venezuelan state oil company PDVSA over crude oil deliveries to countries other than the U.S., according to sources familiar with the discussions.
Meanwhile, OPEC+ is considering whether to continue planned increases in oil production in April or maintain current levels. "Uncertainty is driven by new U.S. sanctions against Venezuela, Iran, and Russia, complicating the global supply outlook," according to eight sources in OPEC+.
Both of these factors are currently directed toward their first monthly reduction in three months. The investment mood has been dampened due to several factors, including concerns related to the slowdown in the U.S. economy, new tariffs, and discussions in OPEC+ about potential increases in production in April and hopes for peace in Ukraine, according to market analyst IG's Toni Sycamore.
Oil prices fell on Friday, poised for their first monthly reduction since November, as concerns over global economic growth and demand for crude outweighed the market's supply pressure. A contract for the delivery of Brent crude with a soon-expiring term was traded down on Friday.
