Oil set for biggest weekly drop since October on tariff uncertainty

Oil prices were little changed on Friday but were set for their biggest weekly decline since October as the uncertainty around US tariff policy is creating concerns about demand growth at the same time major producers are set to increase output.

Brent futures rose 13 cents, or 0.19 per cent, to $69.59 a barrel by 0217 GMT. US West Texas Intermediate crude futures rose 8 cents, or 0.08 per cent, to $66.44 a barrel.

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However, for the week Brent is down 4.9 per cent, set for its biggest weekly decline since the week of October 14. WTI is set to drop 4.8 per cent, also its biggest weekly fall since that week.

Markets, including oil, have been whipsawed by the fluctuating trade policy in the US, the world’s biggest oil consumer.

On Thursday, US President Donald Trump suspended the 25 per cent tariffs he had imposed on most goods from Canada and Mexico until April 2, although steel and aluminium tariffs would still go into effect on March 12 as scheduled.

The amended order does not fully cover Canadian energy products, which are under a separate 10 per cent levy.

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

Brent prices on Wednesday fell to their lowest since December 2021 after US crude inventories rose and in the wake of the 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 that it had decided to proceed with a planned April output increase, adding 138,000 barrels per day to the market.

Some of the downward momentum in prices has eased as the US is looking at steps to halt exports from a key OPEC producer.