Oil prices dropped more than 1 percent on Friday and were on pace for their first weekly loss in three weeks. The decline comes with the backdrop of speculation that OPEC+ could increase crude production in July and increasing tensions over trade between the United States and the European Union.
Brent crude futures fell 64 cents, to $63.80 a barrel. U.S. West Texas Intermediate crude futures fell 64 cents, or 1%, to settle at $60.56.
The market has fallen for four sessions in a row, mostly because of expectations OPEC+ will raise output. The cartel is said to be mulling an extra production hike of 411,000 barrels per day for July, with members meeting next week to make the final call.
In response to market concerns, President Trump made a statement on Friday that he will propose 50% tariffs to the EU from June 1. It is a response, he says, to what he terms unfair trade practiced by the EU.
Analysts say such a high tariff could slow the global economy and drive down demand for oil, especially in Europe, one of the world's largest consumers of crude oil. The possibility for a trade war between two of the world's biggest economies has also added more uncertainty for investors.
At the same time, the oil market is also closely monitoring the progress of U.S.-Iran nuclear talks. The results of these negotiations could influence the course of any Iranian oil exports in the future and therefore global supply balances.
Oil prices had received some support earlier in the week because of fears of potential disruptions in the Middle East. However, the potential increase in OPEC+ supply and the deterioration of trade relations have completely reversed the sentiment.
