– Brent crude futures fall to their lowest since December 2021
– WTI crude futures fall to lowest since May 2023
– US crude stockpiles rise far more than expected, EIA data show
– Canada, China retaliate against Trump tariffs
– OPEC+ to increase output from April
Houston — Global benchmark Brent crude slumped to a more than three-year low on Wednesday, after U.S. crude oil stockpiles posted a larger-than-expected build, adding a further headwind as investors worried about OPEC+ plans to increase output in April and U.S. tariffs on Canada, China and Mexico.
Brent futures were trading $2.58, or 3.6%, lower at $68.46 a barrel by 11:42 a.m. EST. (1642 GMT), after hitting $68.33, the lowest since December 2021.
U.S. West Texas Intermediate crude (WTI) fell $2.90, or 4.3%, to $65.36 a barrel, after touching $65.22, its lowest since May 2023.
U.S. crude stocks rose more than expected last week amid seasonal refinery maintenance, while gasoline and distillate inventories fell due to a hike in exports, the Energy Information Administration said.
Crude inventories rose by 3.6 million barrels to 433.8 million barrels in the week, the EIA said, far exceeding analysts’ expectations in a Reuters poll for a 341,000-barrel rise.
Brent fell more than $2 after the data was released.
“The imposition of tariffs on China, Canada and Mexico by the U.S. sparked swift reprisals from each nation that increased concerns over a slowdown in economic growth and the consequent impact on energy demand,” Ashley Kelty, an analyst at Panmure Liberum, said.
Canada and China retaliated immediately against Trump’s tariffs on Tuesday, and Mexican President Claudia Sheinbaum said the country would respond, without giving details.
OPEC+, the Organization of the Petroleum Exporting Countries and allies including Russia, decided on Monday to increase output for the first time since 2022, pressuring crude prices.
The group will make a small increase of 138,000 barrels per day from April, the first step in planned monthly increases to unwind its nearly 6 million bpd of cuts, equal to almost 6% of global demand.
“There is a bit of a concern in the market that the OPEC+ decision is the start of a series of more monthly supply additions, but the statement from OPEC+ reiterates an approach in bringing back barrels only if the market can absorb them,” UBS analyst Giovanni Staunovo said.
Analysts at Morgan Stanley Research said it was possible OPEC+ would deliver only a few monthly increases, rather than fully unwind the cuts.
The Trump administration also said on Tuesday it was ending a license that Washington granted to U.S. oil producer Chevron since 2022 to operate in Venezuela and export its oil.
The decision puts 200,000 bpd of supply at risk, ING commodities strategists wrote in a note on Wednesday.
*Georgina McCartney, Arathy Somasekhar, Jeslyn Lerh & Arunima Kumar; editing: David Gregorio & Marguerita Choy – Reuters
