DTN Oil Update
Oil Crude Futures Fell, ULSD Up on Severe Weather Demand
HOUSTON (DTN) -- Crude oil futures ended the week on Friday in a bearish trend amid sluggish activity ahead of the inauguration of President-elect Donald Trump's second term and after Israel's security forces confirmed Friday morning the cease-fire in the Gaza Strip and agreed to release hostages.
The NYMEX WTI futures contract for February delivery dropped by $0.64 to $78.04 bbl while the March ICE Brent futures contract fell by $0.48 to $80.81 bbl. The February RBOB futures contract dropped by $0.0102 to 2.1130 gallon.
But the ULSD futures contract for February delivery climbed by $0.0163 to $2.6009 gallon, supported by firm demand driven by expectations of severe weather across the U.S. due to a polar vortex this weekend.
Meanwhile, the U.S. Dollar Index rose by 0.38% to 109.20 against a basket of foreign currencies.
Oil futures markets remained bearish throughout the day as market participants adopted a wait-and-see approach ahead of Trump's presidential inauguration scheduled for Monday, when U.S. markets will be closed due to the Martin Luther King Jr. holiday.
Among his first actions as the new president, Trump is expected to impose trade tariffs on imported goods from China, the European Union, Mexico, Canada, and other countries, which could translate into higher prices for consumers, increasing inflationary pressures on the U.S. economy.
In preparation to punitive trade tariffs from the incoming Trump's administration, strong activity from Chinese exporters was observed in the last months of 2024.
The exports hike contributed to China's GDP reaching a record of 134.9084 trillion yuan (about $18.77 trillion). The Chinese economy expanded by 5.4% year-over-year, surpassing the market expectation of 5%, according to data from the National Bureau of Statistics of China this week.
A recovery in the Chinese economy is widely expected by the oil markets this year, as China's Communist Party leaders have pledged to implement an ambitious stimulus package, including a more flexible fiscal policy and increased government spending.
Maria Eugenia Garcia can be reached at Maria.Garcia@dtn.com