Oil fell as weak U.S. economic data and concerns about rising supplies eroded risk sentiment from a court ruling blocking most Trump administration tariffs.
West Texas Intermediate fell as much as 2.1% to trade near $61 a barrel after Interfax quoted Kazakhstan as saying OPEC+ would raise output at its meeting on Saturday, with the size of the increase still to be decided.
The broader market eased from earlier highs on data showing the U.S. economy shrank at the start of the year, further pressuring commodities. Crude had earlier rallied after a trade court blocked a range of President Donald Trump's trade levies, including a tariff hike on China — the world's largest crude importer.
"The path to sustained higher prices is still very narrow," with the market likely to struggle to absorb additional barrels from OPEC+ over the coming months, said Daniel Ghali, commodity strategist at TD Securities. In the short term, algorithmic selling activity will weigh on prices until the weekend meeting, he added.
Read More: Trump Can Counter Tariff Decisions with Other Tools, Goldman Says Oil prices have been falling since mid-January on concerns about the impact of Trump's tariff war, with a revival of idle production by OPEC+ adding to the drag.
The trade moves have rattled global markets, raising concerns about economic growth and demand for commodities. Elsewhere, government data released Wednesday showed U.S. crude inventories fell by 2.8 million barrels, less than the 4.24 million-barrel draw seen by the industry-funded American Petroleum Institute on Tuesday.
Gasoline stocks — along with other refined products such as distillates — fell by 2.4 million barrels ahead of the summer driving season, providing support for prices. Meanwhile, Libya's eastern government said it would halt oil production and exports in protest after militias stormed the country's oil company headquarters. The move highlights the ongoing threat to output in the OPEC+ producer. Wildfires near Alberta's key oil sands site are also threatening more than 200,000 barrels per day of Canadian output. (alg)
Source: Bloomberg
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