Oil prices fall on rising US inventories, Libyan output

Oil prices dipped on Wednesday, giving up some of last session's gains, as a rise in U.S. crude stockpiles and easing worries over Libyan supplies weighed, although potential U.S. tariffs on Canadian and Mexican imports checked losses.

Brent crude futures fell 7 cents, or 0.1%, to $77.42 a barrel by 0708 GMT, while U.S. crude futures dipped 7 cents, or 0.1%, at $73.70 a barrel.

"While markets are tackling demand side pressures, easing backdrop on supply side is equally weighing over oil prices," said Priyanka Sachdeva, senior market analyst at Phillip Nova in Singapore.

"Markets are under pressure with Trump's plans to boost U.S. oil production and await further clarity on Trump's energy policies."

U.S. President Donald Trump began his term last week issuing several executive orders intended to boost the nation's already record-high oil and gas output.

U.S. crude oil and gasoline stocks rose last week, while distillate inventories fell, market sources said on Tuesday, citing American Petroleum Institute figures.

The Energy Information Administration (EIA), the statistical arm of the U.S. Department of Energy, is due to release its weekly data at 1530 GMT on Wednesday.

The resolution of supply concerns in Libya has also added to selling pressure, said Chiyoki Chen, chief analyst at Sunward Trading in Tokyo.

Those fears eased after the state-run National Oil Corp said on Tuesday export activity was running normally after it held talks with protesters demanding a halt of loadings at one its main oil ports.

The White House said on Tuesday that Trump still plans to issue 25% tariffs on Canada and Mexico on Saturday.

It remains unclear how any new tariffs could affect oil imports to the U.S. from the countries. Canada supplied 3.9 million barrels per day of oil to the U.S. in 2023, roughly half of overall imports for the year, while Mexico supplied 733,000 bpd, according to data from the EIA.

Saudi Arabia's energy minister and several of his OPEC+ counterparts have held talks following Trump's call for lower oil prices and ahead of a meeting next week of OPEC+ oil-producing countries, according to official statements and sources.

Oil benchmarks fell to multi-week lows this week as news of surging interest in Chinese startup DeepSeek's low-cost artificial intelligence (AI) model prompted concerns over energy demand to power data centres, rattling the overall energy sector, while weak economic data from China further soured the demand outlook.

Technology stocks regained ground on Tuesday, a day after the DeepSeek rattled markets.