Oil eases in choppy trading on U.S. tariffs, OPEC+ plans to raise output

Oil prices eased slightly in choppy trade on Thursday with Brent still below $70 under pressure from trade tariffs between the U.S., Canada, Mexico and China, and OPEC+ plans to raise output.

Those factors and a larger than expected build in U.S. crude inventories had sent Brent as low as $68.33 on Wednesday, its weakest since December 2021.

Brent futures were down 29 cents, or 0.4%, at $69.03 a barrel by 11:10 a.m. ET (1610 GMT) on Thursday while U.S. West Texas Intermediate crude futures eased 37 cents, or 0.6%, to $65.90.

"The OPEC news of adding barrels next month, along with a Russian/Ukraine peace deal now looking more promising and a flip/flop of tariffs is keeping crude in a volatile trade," said Dennis Kissler, senior vice president of trading at BOK Financial.

Prices had fallen after the U.S. enacted tariffs on Canadian and Mexican goods, including energy imports, at the same time major producers decided to raise output quotas for the first time since 2022.

Oil recovered and stabilised somewhat after the U.S. said it will make automakers exempt from the 25% tariffs.

A source familiar with the discussions said that U.S. President Donald Trump could eliminate the 10% tariff on Canadian energy imports, such as crude oil and gasoline, that comply with existing trade agreements.

Downside risks on demand will likely be greater than supply side risks at this point with the additional oil coming from OPEC, said Scott Shelton, energy analyst at TP ICAP.