West Texas Intermediate (WTI) crude oil, the US benchmark, is trading around $66.00 during Friday’s early Asian session, remaining on the defensive near a three-year low. Traders are concerned about the ongoing tariff disputes between the US, Canada, and China, as well as plans by OPEC+ to increase oil output.
Earlier in the day, US President Donald Trump issued an executive order temporarily exempting goods from Canada and Mexico from the 25% tariffs imposed earlier this week, under the North American trade agreement (USMCA). However, lingering tariff uncertainty continues to weigh on WTI prices.
Adding to the pressure, US crude inventories surged more than expected. According to the Energy Information Administration (EIA), crude stockpiles for the week ending February 28 rose by 3.614 million barrels, a sharp contrast to the previous week’s decline of 2.332 million barrels. The market had expected a smaller drop of 290,000 barrels, further pressuring prices.
Meanwhile, OPEC+—the coalition of the Organization of the Petroleum Exporting Countries and allied nations, including Russia—has decided to raise output for the first time since 2022. This decision is pushing oil prices lower, with analysts noting that the increased supply may outweigh demand risks at this point. “Downside risks on demand will likely be greater than supply-side risks,” said Scott Shelton, energy analyst at TP ICAP.
Oil traders will now focus on the release of the US February employment report on Friday, which includes key data such as Nonfarm Payrolls (NFP), the Unemployment Rate, and Average Hourly Earnings. A weaker-than-expected outcome could pressure the US Dollar and offer a brief lift to USD-denominated crude prices in the near term.
