The front-month Brent futures initially ticked up this afternoon, rising to $70.75/bbl at 14:10 GMT but dropped to a six-month low of $69.80/bbl at 15:05 GMT. The futures contract met support at this critical level and climbed to $70.80/bbl at the time of writing (17:45 GMT). The sell-off emerged around the US open and was likely driven by OPEC+’s decision to begin increasing its crude output in April 2025, starting with a planned hike of 138kb/d. Further pressure may have come from the introduction of US tariffs on Canadian and Mexican goods, while tariffs on Chinese exports to the US were increased from 10% to 20%. China has swiftly retaliated against the tariff with increases to import levies on $21 billion worth of American agricultural and food products. In other news, the Trump administration has also ended a license that the US granted to oil major Chevron in 2022, which allowed Chevron to operate in Venezuela and export its oil. The license was revoked as Washington accused Venezuelan President Nicolas Maduro of not making progress on electoral reforms and migrant returns. Finally, the market will now await API estimates of US crude oil inventories for the week ending 28 Feb, due tonight at 21:30 GMT. At the time of writing, the May/Jun’25 and May/Nov’25 Brent futures spreads stand at $0.45/bbl and $2.10/bbl, respectively.
