Oil prices were set for a weekly decline of more than 1 percent on Friday amid tariff legal turmoil in the U.S. and a potential OPEC+ output hike.
Brent crude futures slipped 31 cents, or 0.48 percent, to $63.84 a barrel by 4:37 GMT. Meanwhile, U.S. West Texas Intermediate crude fell 30 cents, or 0.49 percent, to $60.64 a barrel.
Trump tariffs remain
U.S. President Donald Trump’s tariffs will remain in effect after a federal appeals court temporarily reinstated them on Thursday, reversing a trade court’s decision on Wednesday to block the “Liberation Day” duties.
The block had sent oil prices falling more than 1 percent on Thursday as traders weighed its effects. Analysts said uncertainty would remain as long as tariff battles remained in the court system.
In addition, members of the Organization of the Petroleum Exporting Countries and its allies are expected to hike July oil production when they meet on Saturday.
Analysts expect OPEC+ to agree on another large supply increase of 411,000 barrels per day. They also expect similar increases until the end of the third quarter, as the group increases its focus on defending its market share.
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Demand outlook uncertain amid economic slowdown
At the same time, OPEC is trying to ensure that some countries that have been producing above their agreed levels, such as Kazakhstan, cut their output.
Kazakhstan has informed OPEC that it does not intend to reduce its oil production. On Thursday, Kazakhstan’s energy minister dismissed complaints from other members over the country’s overproduction, saying that the country’s share in global production is less than 2 percent and that oil prices above $70-$75 per barrel are likely to be suitable for all countries.
On the other hand, the demand outlook for crude oil was hit by the contraction in the U.S. economy. The preliminary GDP contracted by 0.2 percent in the first quarter, slightly better than the expected decline of 0.3 percent.
However, Energy Information Administration (EIA) data showed a surprise 2.8 million barrel draw in U.S. crude inventories for the week ending on May 23, driven by strong seasonal demand.
