Oil prices remained on course to drop to the lowest since June, as concerns grew over demand after U.S. President Donald Trump’s tariffs took effect on Thursday.

Benchmark Brent crude prices slipped to $65.99 per barrel at 3.11 a.m. GMT, while U.S. West Texas Intermediate crude prices fell 16 cents to $63.72 per barrel. Both contracts were on track to slip by more than 5% this week.

Retail sentiment on Stocktwits about the United States Oil Fund (USO) was in the ‘neutral’ territory at the time of writing.

After weeks of negotiations, Trump's tariffs took effect, raising the overall U.S. tariff level to its highest point since the Great Depression, nearly a century ago. While the U.S. has managed to ink deals with several key trading partners, including the European Union and Japan, goods from countries such as Canada, Brazil, and India still face steep tariffs.

This came at a time when weaker-than-expected U.S. jobs data suggested that the economy may not be on the right footing, with consumer sentiment showing signs of weakness.

The Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia, said earlier that they would increase September production by 547,000 barrels per day (bpd) compared to August, the latest in a series of output hikes as they attempt to regain market share.

While summer demand has remained strong in the Western Hemisphere, analysts predict that oil supply will outpace demand by year-end. According to a Reuters report, if WTI futures settle lower on Friday, it will mark the longest consecutive decline since August 2021.

Trump’s additional tariffs on India, due to its purchases of Russian oil, provided support to crude prices. However, the Kremlin said on Thursday that Russian President Vladimir Putin may meet with Trump in the coming days, bringing an end to the war in Ukraine.

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