DTN Oil Update
Oil Slips on Surging US Crude Oil Stockpiles, Tariff Woes
VIENNA (DTN) -- Oil futures softened Thursday morning after U.S. President Trump threatened to impose a 50% tariff on all goods imports from Brazil by Aug. 1, signaling a willingness to revert to high import duties which stoked bearish sentiment. On Wednesday, the U.S. Energy Information Administration confirmed an industry report seeing domestic commercial crude oil stockpiles surging the most since January.
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NYMEX-traded WTI for August was down $0.54 bbl to trade near $67.84 bbl, and ICE Brent for September delivery slipped $0.42 bbl to $69.77 bbl.
August RBOB gasoline futures declined $0.0159 to $2.1720 gallon, while the front-month ULSD futures contract gained $0.0077 to trade near $2.4169 gallon.
The U.S. Dollar Index gained 0.036 points to 97.235.
Earlier this week, the White House sent letters to trading partners announcing tariffs by Aug. 1 and dismissed the possibility of yet another extension of the Aug. 1 tariff deadline. On Tuesday, the President announced a 50% tariff on copper imports into the U.S. and a 25% tariff on pharmaceuticals and semiconductors. While markets have become less reactive to tariff announcements by the U.S. administration, recent statements by the White House have added to fears the President plans to revert to a hawkish, high-tariff trade policy.
Higher tariffs are set to curb oil demand growth at a time when OPEC plans to significantly ramp up production, elevating global oversupply concerns. Eight member states shouldering some 2.2 million bpd in voluntary production cuts, in place since 2023, aim to fully unwind those by the end of September.
Meanwhile, the EIA reported crude oil inventories surging by 7.1 million barrels last week, marking the largest weekly build since January. Sizable draws to gasoline and diesel inventories, however, partially blunted the bearish effect of this surprising jump in crude oil stockpiles.