DTN Oil Update
Oil Futures Slid Amid Tariff Uncertainty
HOUSTON (DTN) -- Oil futures settled lower Tuesday due to concerns of the impact that retaliatory trade tariffs on China, Canada and Mexico by the United States and their potential effects on global crude oil and refined product prices.
The front-month NYMEX WTI futures contract saw a steep decline this morning as it dropped by $2.48 to $70.68, but it rebounded to settle at $72.60, down by 56 cents compared to the previous trading session. Meanwhile, the April ICE Brent futures contract edged up by 0.09% to $76.05 bbl.
The U.S. Dollar Index also recorded a significant drop, falling by 1.07% to 107.81 against a basket of foreign currencies.
Thin trading activity was reported in the oil futures market due to the anxiety generated by the trade war led by the Trump administration. The announcement of additional sanctions on Iranian crude also contributed to the pressure on crude oil benchmarks.
On Feb. 1, the administration of President Donald Trump imposed a 25% additional tariff on imports from Canada and Mexico and a 10% additional tariff on imports from China last Saturday. But two days later, Trump announced a 30-day delay in the implementation of such tariffs on Canada and Mexico after negotiations with the leaders of both countries.
Meanwhile, China Tuesday announced retaliatory tariffs on select American imports and an antitrust investigation into Google as trade tariffs from the U.S. took effect this day, according to an AP news report.
Downstream, March RBOB futures contract fell by $0.0224 to $2.0953 gallon while, ULSD futures contract for March delivery dropped by $0.0408 to $2.0953 gallon.
Separately, Marathon Petroleum's refining and marketing segment reported the fourth quarter adjusted EBITDA of $559 million, down from $2.2 billion for the fourth quarter 2023 driven by lower market crack spreads. Refining operating costs per barrel in the quarter reviewed were $5.26 bbl compared to $5.55 bbl in the fourth quarter 2023.
Maria Eugenia Garcia can be reached at Maria.Garcia@dtn.com