DTN Oil Update
Oil Futures Fell, Hit Lowest Levels Since December
HOUSTON (DTN) -- Oil futures settled lower on Tuesday, hitting their lowest levels since December, after the Conference Board reported Tuesday morning that the Consumer Confidence Index dropped in February to its lowest level in nearly four years.
The drop was seen as a consequence of the uncertainty generated by the trade tariff war led by the Trump administration and concerns about increasing inflation this year.
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The U.S. Consumer Confidence Index fell by 7.0 points in February to 98.3, compared to 105.3 recorded the previous month. It was the lowest index since August 2021 and was below the market expectation of 102.4.
"Consumers became pessimistic about future business conditions and less optimistic about future income. Pessimism about future employment prospects worsened and reached a 10-month high," according to the Conference Board.
The imposition of 10% trade tariffs on imported goods from China and 25% on aluminum and steel imports from Canada and Mexico by the United States, in addition to reciprocal trade tariffs against other U.S. trade partners has raised concerns about inflationary pressures on the U.S. economy.
The NYMEX WTI and ICE Brent futures contract for April delivery dropped by $1.64 to 69.06 bbl, its lowest level since December 27, while the front-month ICE Brent fell by $1.65 to $73.13 bbl. Downstream, the ULSD futures contract for March delivery increased by $0.0417 to $2.3941 gallon while March RBOB futures contract rose by $0.0412 to $1.9698 gallon.
The U.S. Dollar Index fell by 0.29% to 106.22 against a basket of foreign currencies.
The bearish sentiment was further supported by expectations of ample supplies, despite additional sanctions imposed by the United States on Iranian oil trade.
Monday, Feb. 24, the Treasury's Office of Foreign Assets Control and the U.S. Department of State imposed sanctions on 30 individuals and vessels that presumably participated in the sale and transportation of Iranian petroleum.
The individual sanctioned include oil brokers in the United Arab Emirates and Hong Kong, tanker operators and managers in India and China, the head of Iran's National Iranian Oil Company, and the Iranian Oil Terminals Company, "whose operations help finance Iran's destabilizing activities," according to a Department of the Treasury statement.
