Crude oil prices have fallen to their lowest levels in six months, driven by expectations of increased supply and economic uncertainty caused by U.S. trade policies.
As of Wednesday, West Texas Intermediate (WTI) crude oil for April delivery dropped by $1.35 to settle at $66.91 per barrel—its lowest since September 10. Meanwhile, May Brent crude fell by $1.12, bringing its price below the $70 mark to $69.92 per barrel.
According to the American Petroleum Institute (API), private oil inventories in the U.S. decreased by 1.46 million barrels last week. This drop exceeded market expectations of a 0.3 million barrel decline, suggesting a tighter supply than anticipated.
The U.S. Energy Information Administration (EIA) is expected to release official storage data soon. However, despite declining inventory levels, traders remain concerned about a supply surge. The Organization of the Petroleum Exporting Countries and its allies (OPEC+) have announced plans to gradually restore 2.2 million barrels per day of production cuts over 18 months, starting next month.
Adding to market jitters, economic growth in the U.S. appears to be slowing. President Donald Trump recently escalated trade tensions by imposing new tariffs on Canada and Mexico—two of the country’s largest trading partners—at a time when the economy is already under strain.
The Federal Reserve Bank of Atlanta’s GDPNow forecast predicts that the U.S. economy could contract by 2.8% in the first quarter of the year. Additionally, the latest ADP private sector employment report revealed a significant slowdown in hiring, with only 77,000 new jobs added last month—far below expectations of 142,500.
“When economic prospects look grim, oil prices tend to decline. And with OPEC+ preparing to increase supply, the downward pressure is significant,” noted analysts at PVM Oil Associates. However, they also highlighted that if prices remain low, OPEC+ could reconsider its production increase to stabilize the market.
Meanwhile, the European Union (EU) has introduced new sanctions against Russia, targeting aluminum imports and Russia’s so-called “shadow fleet”—a network of 73 tankers used to evade existing crude oil export restrictions. The sanctions will also affect Russian banks and various companies, potentially adding further strain to the global oil trade. In response, Russian officials downplayed the impact, stating that their export strategies remain viable beyond Western markets.
