Oil prices declined on Thursday amid US President Donald Trump's tariff policies, coupled with expectations that the US Federal Reserve (Fed) will keep interest rates steady for a prolonged period and data suggesting higher US production.
The international benchmark, Brent crude, decreased by around 0.8% trading at $72.66 per barrel at 11.41 a.m. local time (0841 GMT), down from $73.29 at the previous session's close.
The US benchmark, West Texas Intermediate (WTI) fell by about 0.9%, settling at $69.12 per barrel, compared to its prior session close of $69.76.
Trump announced plans to impose a 25% tariff on countries purchasing oil or gas from Venezuela starting April 2. Venezuela's oil exports remain a key pillar of its economy, with China serving as its largest buyer. He also announced a 25% tariff on all imported automobiles and spare parts.
Market participants remain cautious about the broader economic impact of these measures, as higher vehicle prices could suppress car sales and reduce manufacturing activity—potentially leading to lower fuel demand.
Meanwhile, developments surrounding the tariffs have also increased uncertainty regarding the Fed's next steps.
Chicago Fed President Austan Goolsbee stated that the next interest rate cut may be delayed due to economic uncertainty.
Minneapolis Fed President Neel Kashkari expressed uncertainty about the tariffs' impact on the US economy, noting that while they could drive up prices—supporting the case for higher interest rates—they might also slow economic growth, warranting lower borrowing costs.
Kashkari indicated that the Fed may need to maintain its current monetary policy stance for an extended period until the economic outlook becomes clearer.
Analysts note that higher interest rates could exert additional pressure on oil prices in the coming months.
Data suggesting increased oil production in the US, the world's largest oil-consuming country, also contributed to downward price movements by easing market participants' supply concerns.
The US Energy Information Administration reported that crude oil production in the country rose by 1,000 barrels per day (bpd) to approximately 13.57 million bpd during the week ending March 21.
By Duygu Alhan
Anadolu Agency
energy@aa.com.tr