Oil prices rose on Friday but fell for the biggest weekly drop since October as uncertainty over U.S. tariff policy raised concerns about demand growth at a time when major producers are preparing to increase output.

Brent crude futures rose 50 cents, or 0.72%, to settle at $69.96 a barrel by 0746 GMT. U.S. West Texas Intermediate crude futures rose 47 cents, or 0.71%, to settle at $66.83 a barrel.

But Brent fell 4.9% for the week, its biggest weekly drop since the week of Oct. 14. WTI is set to drop 4.8%, also its biggest weekly drop since that week.

Markets, including oil, have been rattled by volatile trade policy in the U.S., the world's biggest oil consumer.

"It looks like financial markets are in full panic mode, no longer easily soothed by Trump's one-month tariff delays and exemptions," said Vandana Hari, founder of oil market analytics provider Vanda (NASDAQ:VNDA) Insights.

"That has crude stuck around a four-month low, though vulnerable to further declines," he added.

On Thursday, U.S. President Donald Trump suspended the 25% tariffs he had imposed on most Canadian and Mexican goods until April 2, although steel and aluminum tariffs are still due to go into effect on March 12 as scheduled.

The amended order does not fully cover Canadian energy products, which fall under a separate 10% levy.

The tariffs themselves are seen as a drag on economic growth and therefore oil demand growth. But uncertainty over the policy is also slowing business decisions, which also impacts the economy.

"Risks to oil prices remain skewed to the downside with fresh supply from OPEC+ and non-OPEC producers expected to push the market into oversupply," Fitch's research unit BMI said in a note.

Brent crude prices fell to their lowest since December 2021 on Wednesday after U.S. crude inventories rose and following a decision by the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, to increase their output quotas.

The group said on Monday it had decided to go ahead with a planned production increase in April, adding 138,000 barrels per day to the market.

Some of the downward momentum in prices has eased as the U.S. considers steps to cut off exports from OPEC's top producer, Iran.

"We will shut down Iran's oil sector and drone manufacturing capabilities," U.S. Treasury Secretary Scott Bessent said in his first major speech to Wall Street executives.

Reuters reported on Thursday that Trump is considering a plan to inspect Iranian oil tankers at sea using a treaty aimed at weapons of mass destruction, sources said, part of the U.S. president's "maximum pressure" campaign to drive Iran's oil exports to zero. (Newsmaker23)

Source: Investing.com