Oil prices plunged about 2% to their lowest in two months on Tuesday as weak economic news from the U.S. and Germany fueled concerns about slowing energy demand, along with signs from some countries that oil production would increase.

Brent crude futures fell $1.76, or 2.4%, to settle at $73.02 a barrel, while U.S. West Texas Intermediate (WTI) crude fell $1.77, or 2.5%, to settle at $68.93.

That was the lowest close for Brent since Dec. 23 and WTI since Dec. 10.

U.S. data showed consumer confidence deteriorated at its sharpest pace in 3-1/2 years in February, with 12-month inflation expectations surging.

Analysts said President Donald Trump's plans for higher tariffs have raised inflation concerns at the U.S. Federal Reserve. That could prompt the Fed to keep interest rates higher, which in turn could slow economic growth and energy demand.

Trump said tariffs on Canadian and Mexican imports, scheduled to take effect on March 4, were "on time and on schedule," which could boost oil prices by reducing supply from both countries.

However, "tariffs are increasingly seen as a negative influence on global economic growth that could force additional downward revisions in global oil demand," said analysts at energy advisory firm Ritterbusch and Associates. Data showed Germany's economy shrank by 0.2% in the final quarter of 2024 from the previous quarter. Germany's election winner, Friedrich Merz, ruled out a quick reform of the country's borrowing limits, known as the "debt brake," which some investors have called for to boost the economy. (Newsmaker23)

Source: Investing.com