DTN Oil Update
Oil Futures Decline Despite Crude Inventory Draw
HOUSTON (DTN) -- Oil futures were mixed Wednesday morning after hitting their lowest levels since December in the previous trading session, amid concerns over trade tariffs and the American Petroleum Institute reporting a draw in crude inventory for the week ending Feb. 21.
The NYMEX WTI and ICE Brent futures contract for April delivery edged up by $0.16 to $69.09 bbl, its lowest level since Dec. 27, while the front-month ICE Brent was steady at $73.05 bbl. In contrast, the ULSD futures contract for March delivery fell by $0.0380 to $2.3523 gallon while March RBOB futures contract dropped by $0.0090 to $1.9583 gallon.
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The U.S. Dollar Index fell by 0.29% to 106.51 against a basket of foreign currencies.
The API reported a draw in commercial crude of 640,000 bbl in the week ended Feb. 21, the first week since mid-January. Separately, supply at the Cushing, Oklahoma tank farm -- the delivery point for NYMEX WTI futures -- rose 1.182 million bbl.
Last week, gasoline inventory rose 573,000 bbl and distillate fuel supply fell 1.109 million bbl, the API data showed.
Oil futures continued under pressure as market participants continued to assess the impact that 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, could have on the U.S. economy.
Tuesday, Feb. 25, the Conference Board reported that 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.
The drop in consumer confidence was attributed in part to the uncertainty generated by the trade tariff war.
The bearish sentiment in the oil futures market has been reinforced also by expectations of ample supplies, driven by the possibility of an end of the Russia-Ukraine war, which entered its third year this week.
