Oil prices drop as US stockpile grows, tariffs remain in focus

Oil prices edged lower on Wednesday, with the U.S. benchmark down nearly 1% after crude stockpiles in the world's top petroleum producer and consumer rose more than expected last week.

Brent crude futures were down 43 cents, or 0.6%, at $77.06 a barrel by 12:14 p.m. EST (1714 GMT). U.S. crude futures fell 64 cents, or 0.9%, to $73.13.

Crude oil stockpiles in the U.S. rose by 3.46 million barrels last week as refiner intake slumped for the third consecutive week, data from the Energy Information Administration showed on Wednesday.

Analysts polled by Reuters had expected a 3.19 million-barrel increase.

Oil trade is expected to be choppy in the near-term as investors digest a string of recent developments, such as U.S. tariff threats, sanctions on Russian energy flows, and economic growth concerns in top consuming nations, UBS analyst Giovanni Staunovo wrote to clients on Wednesday.

"Considering the many prevailing uncertainties, we think a prudent approach is still warranted," Staunovo wrote.

"While we expect prices to stay supported at current levels, news flow related to President Trump is likely to drive volatility in the near term."

The White House on Tuesday reaffirmed U.S. President Donald Trump's plan to impose 25% tariffs on imports from Canada and Mexico from Feb. 1.

Traders are also looking ahead to an OPEC+ ministerial meeting scheduled for Feb. 3, with the group's plan to increase supply from April in focus.