West Texas Intermediate (WTI) crude oil, the U.S. benchmark, is trading at around $67.65 early Wednesday in the Asian session, facing downward pressure from geopolitical uncertainties, an OPEC+ production increase, and U.S. tariffs on Canada, Mexico, and China.
On Monday, OPEC+—comprising the Organization of the Petroleum Exporting Countries and its allies, including Russia—announced a plan to increase oil production starting in April, following a series of output cuts aimed at stabilizing the market. The decision has raised concerns that OPEC’s focus on political priorities may outweigh its price stabilization efforts.
“The shift in OPEC’s strategy suggests they are prioritizing politics over price, potentially influenced by the dealings of President Donald Trump,” said Bjarne Schieldrop, chief commodities analyst at SEB.
In addition to the OPEC+ announcement, U.S. crude oil inventories saw a larger-than-expected decline last week. According to the American Petroleum Institute’s (API) weekly report, crude stockpiles for the week ending February 28 dropped by 1.455 million barrels, surpassing the previous week’s decrease of 640,000 barrels. Analysts had forecasted a more modest decline of 300,000 barrels.
Geopolitical factors are further weighing on the market, as President Trump confirmed that tariffs on Canadian and Mexican goods would take effect on Tuesday, with tariffs on Chinese imports increasing from 10% to 20%. These measures are expected to slow economic activity and reduce energy demand, contributing to the pressure on WTI prices.
