Oil prices declined sharply on Wednesday in response to President Trump's tariffs and OPEC Plus's decision to increase crude production. Analysts were surprised by the decision to boost output amid ongoing trade tensions, which could negatively impact global demand. Brent crude fell to $68.50 per barrel, while West Texas Intermediate dropped over 4%. Increased U.S. crude inventories and a complex interplay of international trade, economic performance, and OPEC agreements further influenced oil market dynamics, raising concerns about future demand amid potential economic slowdown.
Analysts were thinking they would surely defer the increases given the macroeconomic threat from tariffs, said David Fyfe, chief economist of Argus Media.
On Wednesday, prices for Brent crude futures plummeted about 3.6 percent to $68.50 a barrel, the lowest since 2021.
Oil consumption is highly sensitive to the performance of the world economy, which might slow if the trade war heats up.
Several members of OPEC Plus, including the United Arab Emirates and Iraq, want to increase production, partly to fulfill agreements with international investors.
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