Oil Heads for First Monthly Decline Since November Amid Economic Uncertainty

Oil prices edged lower on Friday, poised for their first monthly decline since November, as concerns over global economic growth and fuel demand weighed on the market. Uncertainty stemming from Washington's tariff threats and further signs of a U.S. economic slowdown overshadowed supply risks.

The more active May Brent crude futures fell 31 cents, or 0.4%, to $73.26 a barrel by 0133 GMT, while U.S. West Texas Intermediate (WTI) crude dropped 30 cents, or 0.4%, to $70.05 a barrel. The front-month Brent contract expires later on Friday. Both benchmarks are on track for their first monthly decline in three months.

Investor sentiment has been dampened by multiple factors, including U.S. economic slowdown fears, new tariffs, OPEC+ discussions on potential supply increases in April, and hopes for peace in Ukraine, according to IG market analyst Tony Sycamore.

"The only counter argument is that prices have already fallen significantly," Sycamore noted, adding that WTI remains technically supported between $65 and $70 per barrel.

Adding to market pressure, U.S. President Donald Trump on Thursday confirmed that his proposed 25% tariffs on Mexican and Canadian goods will take effect on March 4, alongside an additional 10% duty on Chinese imports.

Further weighing on prices, U.S. economic data revealed that jobless claims rose more than expected last week, while another government report confirmed a slowdown in economic growth during the fourth quarter.

However, oil prices gained more than 2% on Thursday after Trump revoked a license previously granted to U.S. oil major Chevron to operate in Venezuela. The move raised supply concerns and could lead to new negotiations between Chevron and Venezuelan state oil company PDVSA for crude exports to destinations other than the United States, according to sources familiar with the discussions.

Meanwhile, OPEC+ is evaluating whether to proceed with a planned oil output increase in April or maintain current levels. The uncertainty arises from fresh U.S. sanctions on Venezuela, Iran, and Russia, complicating the global supply outlook, according to eight OPEC+ sources.

Follow Emirates 24|7 on Google News.