Oil prices fell almost 2% on Wednesday as sources said OPEC+ would consider accelerating its oil output increases in June, but losses were curbed following a report that U.S. President Donald Trump may cut tariffs on Chinese imports.
Brent crude futures were down $1.13, or 1.68%, at $66.31 by 12:31 p.m. EDT (1631 GMT) while U.S. West Texas Intermediate crude lost $1.21, or 1.9%, to $62.46.
Several OPEC+ members will suggest that the group accelerate oil output increases for a second consecutive month in June, three sources familiar with OPEC+ talks told Reuters.
There have been recent tensions among OPEC+ members over compliance with production quotas.
"It wouldn’t surprise me that OPEC wants to raise production. It could raise concerns about the cohesion of the cartel. Maybe they’re tired of holding back production increases," said Phil Flynn, an analyst with Price Futures Group.
Brent had traded at $68.65 a barrel earlier in the session, its highest since April 4. Both benchmarks fell more than $2 after the OPEC+ news.
Kazakhstan's new energy minister told Reuters his country will prioritise national interests over those of the OPEC+ producer group when deciding its oil output levels.
Kazakhstan has angered other OPEC+ members by producing more than its allotted quota.
U.S. crude stocks rose while gasoline and distillate inventories posted larger-than-expected draws last week, the Energy Information Administration said on Wednesday.
Crude inventories rose by 244,000 barrels to 443.1 million barrels in the week ended April 18, the EIA said, compared with analysts' expectations in a Reuters poll for a 770,000-barrel draw.
News on trade tariffs provided a floor to oil prices. The Trump administration would look at lowering tariffs on imported Chinese goods pending talks with Beijing, a source familiar with the matter said on Wednesday, adding that any action would not be made unilaterally.
The China tariffs are likely to come down to between 50% and 65%, according to a Wall Street Journal report, citing a White House official.
Trump has backed away from the threat of firing Federal Reserve Chair Jerome Powell after days of criticising the Fed for not cutting interest rates, easing investor fears about economic uncertainty.
The U.S. issued new sanctions targeting an Iranian shipping magnate whose network handles Iranian liquefied petroleum gas and crude oil worth hundreds of millions of dollars.
