AT 10:25 GMT, July WTI crude oil futures are trading $57.98, down $1.16 or -2.00% and August Brent crude oil is at $67.39, down $1.28 or -1.86%. U.S. West Texas Intermediate crude settled down 3.8%, at $56.59/Bbl.
Hedge funds and speculative investors continued to lower their exposure to instruments tied to higher US crude prices for the fourth consecutive week, WSJ separately reported.
Front-month benchmark Brent crude, the worldwide benchmark for oil prices, fell 2.6 percent to $63.64 per barrel, while U.S. West Texas Intermediate (WTI) crude futures were down 2.1 percent at $55.39 per barrel.
Many analysts project that the Mexico trade dispute will trigger the ongoing trade war between the United States and China.
Front-month Brent crude futures, the global benchmark for oil prices, were at 66.28 US dollars at 0311 GMT, down by 59 cents, or 0.9 percent, from last session's close.
Washington will sanction any country which buys oil from Iran after the expiration of waivers on May 2, U.S. Special Representative for Iran Brian Hook said on Thursday.
According to the U.S. Energy Information Administration (EIA), last week, crude stocks dropped by around 300,000 barrels to 476.49 million barrels.
The API data were released as oil prices are benefiting from output cuts by the major producers and falling supplies from Iran.
USA production has offset that decline, as output returned to a record 12.3 million barrels per day, according to weekly figures.
Iranian May crude exports dropped to less than half of April levels at around 400,000 barrels per day (bpd), tanker data showed and two industry sources said, after the United States tightened sanctions on Tehran's main source of income. US rig count data is due at 1:00 p.m. EDT (1700 GMT), an indication of future production.
Because of weakening demand, Bernstein said any upside for oil markets was capped despite relatively tight supply.
OPEC and other major oil producers, including Russian Federation, pledged in December to cut production by 1.2 million barrels per day in order to prop up prices, effective from this January. The Organization of the Petroleum Exporting Countries is expected to meet in coming weeks.