Oil prices fell about 2% to a 12-week low on Monday on reports OPEC+ will proceed with a planned oil output increase in April and worries U.S. tariffs could hurt global economic growth and oil demand.

 

Brent futures fell $1.19, or 1.6%, to settle at $71.62 a barrel, while U.S. West Texas Intermediate (WTI) crude fell $1.39, or 2.0%, to settle at $68.37.

 

Those were the lowest closes for Brent since December 6 and WTI since December 9.

 

"Crude oil is under siege on multiple fronts and is vulnerable to the latest bearish headline or economic data," Bob Yawger, director of energy futures at Mizuho, said in a report, pointing to the OPEC+ decision, U.S. manufacturing data, Ukraine peace talks and U.S. tariffs.

 

The Organization of the Petroleum Exporting Countries (OPEC) and allies like Russia, known as OPEC+, decided to proceed with a planned April oil output increase, three sources from the producer group told Reuters on Monday.

 

OPEC+ has been cutting output by 5.85 million barrels per day (bpd), equal to about 5.7% of global supply, agreed in a series of steps since 2022 to support the market.

 

Britain said several proposals had been made for a truce in fighting between Ukraine and Russia, after France floated a plan for a one-month pause leading to peace talks, but U.S. President Donald Trump suggested his patience was running out.

 

The U.S., meanwhile, is drawing up a plan to potentially give Russia sanctions relief as Trump seeks to restore ties with Moscow and stop the war in Ukraine.

 

Russia is the third-biggest oil producer behind the U.S. and Saudi Arabia and is a member of OPEC+.
U.S. TARIFFS

 

On the trade front, Trump will decide on Monday what levels of tariffs the U.S. will impose early on Tuesday on Canada and Mexico amid last-minute negotiations over border security and efforts to halt the inflow of fentanyl opioids.

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