Oil prices ease on US tariff uncertainty ahead of expected OPEC+ output boost

Oil prices fell slightly on Thursday as the possibility of U.S. tariffs being reinstated raised questions about demand ahead of an expected supply boost by major producers.

Brent crude futures fell 56 cents, or 0.81%, to $68.55 a barrel by 12:46 p.m. EDT (1642 GMT). U.S. West Texas Intermediate crude declined 70 cents, or 1.04%, to $66.75 in trade thinned by the Independence Day holiday.

The 90-day pause on implementation of higher U.S. tariffs ends on July 9, and several large trading partners have yet to clinch trade deals, including the European Union and Japan. Oil traders are worried about the impact on the economy and fuel demand.

A surprise build in U.S. crude inventories also highlighted demand concerns in the world's biggest crude consumer.

The U.S. Energy Information Administration said on Wednesday that domestic crude inventories rose by 3.8 million barrels to 419 million barrels last week. Analysts in a Reuters poll had expected a drawdown of 1.8 million barrels.

U.S. job growth was solid in June while unemployment rates fell unexpectedly, data showed on Thursday. However, nearly half of the increase in nonfarm payrolls came from the government sector, with private sector gains slowing considerably as industries like manufacturing and retail grappled with the Trump administration's aggressive tariffs on imports.

"Thursday's jobs report was stronger than expected, which shows that the resiliency we have been seeing in the economy over the past several months is still intact. We still expect the Federal Reserve to continue its wait and see approach on interest rates," said David Laut, chief investment officer of Abound Financial.

Both contracts hit one-week highs on Wednesday as oil producer Iran suspended cooperation with the U.N. nuclear watchdog, raising concerns that the lingering dispute over its nuclear programme could again evolve into armed conflict.