NEW YORK/LONDON: Oil prices were down 1% on Monday on fears that U.S. tariffs on Canada, Mexico and China would slow economies around the world and slash energy demand while OPEC+ ramps up its supply.
Brent crude oil futures futures settled at $69.28 a barrel, down $1.08, or 1.5%. U.S. West Texas Intermediate futures settled at $66.03 a barrel, shedding $1.01, 1.5%.
Last week marked WTI's seventh consecutive weekly decline, the longest losing streak since November 2023, while Brent fell for a third consecutive week.
U.S. President Donald Trump's protectionist policies have roiled markets across the world, with Trump imposing and then delaying tariffs on his country's biggest oil suppliers -- Canada and Mexico -- while also raising duties on Chinese goods. China and Canada have responded with tariffs of their own.
"This market is on tenterhooks and there's a lot to be processing as we move forward," said John Kilduff, partner with Again Capital in New York. "There are recession talks for the U.S. and it's very concerning for the macro picture."
Over the weekend, U.S. Commerce Secretary Howard Lutnick said Trump would not let up pressure on tariffs on Mexico, Canada and China.
Investors now are worried about a possible economic slowdown that could curtail oil demand. Stocks, which crude prices often follow, continued a steep decline amid tariffs concerns, with the benchmark S&P 500 falling 2% in mid-day trade and the Nasdaq Composite sliding more than 3%.
On Friday, Russia's Deputy Prime Minister Alexander Novak said the OPEC+ group agreed to start increasing oil production from April, but could reverse the decision afterwards if there are market imbalances.
Also on the supply front, Trump is seeking to choke off Iranian oil exports as part of efforts to pressure Tehran to rein in its nuclear programme. Iran's Supreme Leader Ayatollah Ali Khamenei said on Saturday that his country will not be bullied into negotiations.
Possible sanctions against Iran and Russia could provide support in the short term, said PVM analyst Tamas Varga.
"Looking at the bigger picture, lingering uncertainties will likely make any oil rally brief," Varga said.
Oil rebounded from six-month lows on Friday after Trump said the United States would intensify sanctions on Russia if it fails to reach a ceasefire deal with Ukraine.
The U.S. is also studying ways to ease sanctions on Russia's energy sector if Moscow agrees to end its war with Ukraine, two people familiar with the matter told Reuters.
Later this week, investors will assess monthly reports from the International Energy Agency and OPEC for demand and supply forecasts. (Reporting by Enes Tunagur in London and Florence Tan in Singapore; Editing by David Goodman, Franklin Paul, Susan Fenton and David Gregorio)
