Oil prices fell about 2% to their lowest in two weeks on Tuesday as investors braced for OPEC+ to raise output and worried that U.S. President Donald Trump's tariffs would hurt the global economy and slow demand for the fuel.

Brent crude futures fell $1.61, or 2.4%, to settle at $64.25 a barrel. U.S. West Texas Intermediate (WTI) crude fell $1.63, or 2.6%, to settle at $60.42.

Both benchmarks posted their lowest closes since April 10.

Trump's aggressive tariffs on U.S. imports have made it more likely the global economy will slip into recession this year, according to a majority of economists polled by Reuters.

China, which has been hit with the heaviest tariffs, has responded with its own levies on U.S. imports, fueling a trade war between the top two oil consumers. Analysts have sharply lowered their forecasts for oil demand and prices.

"Trade between China and the U.S. has slowed to a semi-embargo flow. Every day that passes without a deal with any major trading partner brings us one day closer to a global demand destruction situation," Bob Yawger, director of energy futures at Mizuho, ​​said in a note.

The U.S. goods trade deficit widened to a record high in March as businesses stepped up efforts to bring in goods ahead of Trump's big tariffs, suggesting trade was a major drag on economic growth in the first quarter.

The fallout from Trump's trade war reverberated in the corporate world on Tuesday, as delivery giant UPS said it would cut 20,000 jobs to lower costs. Automaker General Motors (NYSE:GM) pulled its outlook and postponed its investor call until Thursday pending possible changes to trade policy.

Trump is poised to soften the blow of his auto tariffs through an executive order that combines credits with other relief on parts and materials, after automakers made their demands to the government.

British oil major BP (NYSE:BP) reported a deeper-than-expected 48% drop in net profit to $1.4 billion as refining and gas trading weakened.

Energy markets await earnings from U.S. oil majors Exxon Mobil (NYSE:XOM) and Chevron (NYSE:CVX) this week.

PRODUCTION RISES

Some members of the Organization of the Petroleum Exporting Countries and allies in OPEC+ are set to accelerate output increases for a second straight month in June, sources told Reuters last week.

"Another output increase from OPEC+ could not come at a worse time when sentiment is already weak, and with Kazakhstan showing little interest in cutting output," said Saxo Bank analyst Ole Hansen.

OPEC+ member Kazakhstan increased oil exports by 7% year-on-year in January-March thanks to increased supplies via the Caspian pipeline, Reuters calculations based on official data and sources showed on Tuesday.

US OIL INVENTORIES

US oil inventory data from the American Petroleum Institute trade group is due on Tuesday and from the US Energy Information Administration on Wednesday. [EIA/S] [API/S]

Analysts expect energy firms to add about 0.5 million barrels of oil to US inventories during the week ended April 25.

If correct, that would be the fifth straight weekly build and compares with a build of 7.3 million barrels during the same week last year and an average build of 3.2 million barrels over the past five years (2020-2024).(Newsmaker23)

Sumber: Reuters