Investing.com-- Oil prices fell Wednesday, dropping for the third day in a row on tariff-related headwinds and increasing global production.

At 08:35 ET (13:35 GMT), Brent oil futures expiring in May fell 1.6% to $69.92 a barrel, while West Texas Intermediate crude futures dropped 2.1% to $66.82 a barrel.

Crude prices continue to fall

Both contracts remained close to a five-month low hit earlier this week as investors fretted over worsening demand amid economic headwinds from increased U.S. trade tariffs. This came as U.S. President Donald Trump delivered on his threats of higher tariffs against China, Canada, and Mexico.

Oil markets were also rattled by reports that the Organization of Petroleum Exporting Countries and allies (OPEC+) will proceed with a plan to begin increasing production, albeit marginally, from April.

"The prospect of rising OPEC+ supply, combined with intensifying uncertainty over tariffs, hit oil market sentiment," said analysts at ING, in a note.

"Overnight, there were suggestions that the Trump administration is considering some tariff relief on imports from Canada and Mexico. But heightened uncertainty is sending investors to the sidelines. This is evidenced by a reduction in speculative positioning in both WTI and Brent in recent weeks."

China targets 5% GDP, outlines stimulus plans

Still, crude prices found some relief from China - the world’s biggest oil importer - setting a 5% economic growth target for 2025 while outlining a slew of stimulus measures.

The figure was revealed at the opening of the annual meeting of the National People’s Congress, China’s most important political meeting.

Beijing outlined a higher budget deficit for 2025, heralding more fiscal spending, and also promised more action to boost local consumption, which has been a major point of pressure on local growth.

Beijing will also ramp up its debt issuance in 2025 to allocate more resources towards consumer subsidies.

US inventories see bigger-than-expected draw - API

Data from the American Petroleum Institute showed that U.S. oil inventories shrank nearly 1.5 million barrels in the week to February 28, more than expectations for a draw of 0.3 million barrels.

If confirmed by the official inventory data , due later Wednesday, this could indicate that fuel demand was improving after four straight weeks of outsized builds.

Oil prices were battered by Trump also calling on higher energy production, domestically and abroad.

(Ambar Warrick contributed to this article.)