Oil prices fell for a third day on Wednesday, as investors worried about OPEC+'s plan to continue raising output in April, and U.S. President Donald Trump's tariffs on Canada, China and Mexico escalated trade tensions.

Brent crude futures fell $1.02, or 1.44%, to settle at $70.02 a barrel by 1149 GMT. U.S. West Texas Intermediate (WTI) crude futures fell $1.33, or 1.95%, to settle at $66.93 a barrel.

Crude prices closed near their lowest levels in months the previous day, weighed down by expectations that U.S. tariffs and retaliatory tariffs by affected countries would slow economic growth and reduce fuel demand.

"The U.S. tariffs on China, Canada and Mexico have prompted swift retaliatory action from each country, raising concerns about slowing economic growth and the impact on energy demand," said Ashley Kelty, an analyst at Panmure Liberum.

Canada and China quickly retaliated against Trump's tariffs on Tuesday, and Mexican President Claudia Sheinbaum said the country would respond, without providing details.

Meanwhile, the Organization of the Petroleum Exporting Countries and its allies including Russia, a group known as OPEC+, decided on Monday to increase output for the first time since 2022, further pressuring crude prices.

The group will make a small increase of 138,000 barrels per day starting in April, the first step in planned monthly increases to end cuts of nearly 6 million barrels per day, equivalent to nearly 6% of global demand.

"There is some concern in the market that the OPEC+ decision is the start of a series of monthly supply additions, but the statement from OPEC+ reiterated its approach to returning barrels only if the market can absorb them," said UBS analyst Giovanni Staunovo.

Analysts at Morgan Stanley Research said it was likely OPEC+ would only deliver a few monthly increases, rather than end cuts altogether.

The Trump administration also said on Tuesday that it would end a license the U.S. has given to U.S. oil producer Chevron (NYSE:CVX) since 2022 to operate in Venezuela and export its oil.

The decision puts 200,000 barrels per day of supply at risk, ING commodity strategists wrote in a note on Wednesday.

Meanwhile, U.S. crude stockpiles fell by 1.46 million barrels in the week to Feb. 28, market sources said, citing figures from the American Petroleum Institute on Tuesday.

Investors are awaiting government data on U.S. inventories, due on Wednesday. (Newsmaker23)

Source: Investing.com