DTN Oil Update
Oil Futures Dip on Tariff War and Unemployment Data
HOUSTON (DTN) -- Oil futures dropped Friday morning following punitive tariffs imposed by the United States on nations that had not reached an agreement with the Trump administration by the deadline set for today. The bearish sentiment was also supported by a slight increase in unemployment in July.
The front-month NYMEX WTI futures contract dropped by $0.79 to $68.47 bbl, while the September ICE Brent futures contract decreased by $0.88 to $70.82 bbl. The August RBOB futures contract fell by $0.0400 to $2.1339 gallon, while the ULSD futures contract for August delivery dropped by $0.0518 to $2.3441 gallon.
The U.S. dollar rose by 1.048 points to 98.695 against a basket of foreign currencies.
After a 90-day pause announced in April, the United States has imposed additional tariffs ranging from 30% to 50% on several nations -- including India, Brazil and Canada, among others. Deals with Mexico and China remain pending.
The escalation of a trade war is expected to affect global economic growth and add inflationary pressure to the U.S. economy.
This morning, the Bureau of Labor Statistics reported that nonfarm employment growth in the United States in July rose by 73,000, below market expectations for job gains around 150,000, and reflecting ongoing softness in labor demand since April.
The U.S. unemployment rate was unchanged at 4.2% in July, holding in a 4.0% to 4.2% range since May 2024. The labor force participation rate at 62.2% and the employment-population ratio at 59.6% were both little changed last month.
Separately, starting today, OPEC+ countries -- including Saudi Arabia, Iraq, Kuwait, Russia, the UAE, Algeria, Oman and Kazakhstan -- are expected to increase their crude output by 548,000 bpd starting today, in addition to their 411,000-bpd output increase set in July. These actions are expected to put additional downward pressure on oil future price.
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