DTN Oil Update
Oil Futures Slump, US Dollar Rises on Car Tariff Relief
HOUSTON (DTN) -- Oil futures dropped almost $2 on Tuesday, driven by weak global demand and expectations of plentiful supplies from OPEC + countries, amid signals of a potential recession of the U.S. economy supported by economic data.
Crude oil futures continued their downward trend for the second consecutive trading day, as OPEC+ countries are expected to increase oil output by 140,000 bpd in May, in addition to 2.2 million bpd output released on April 2.
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The front-month NYMEX WTI futures contract dropped by $1.28 to $60.77 bbl, while the ICE Brent futures contract for June delivery fell by $1.40 to $64.46, respectively.
May RBOB gasoline futures contract was down by $0.0358 to $2.0700 gallon, while the front-month ULSD futures contract fell by $0.0340 to $2.1415 gallon.
This morning, the Conference Board reported U.S. consumer confidence fell for the fifth consecutive month in April, with the index dropping by 7.9 points to 86.0 from 93.9 in March.
The Expectations Index, which reflects consumers' short-term outlook for income, business and labor market conditions, dropped by 12.5 points to 54.4, the lowest level since October 2011, and well below the threshold of 80 "that usually signals a recession ahead."
Separately, job openings in the U.S. labor market edged down to 7.2 million in March, compared to 7.5 million reported the previous month, and it dropped by 901,000 year-over-year, according to data released this morning by the Bureau of Labor Statistics.
The figure was below market expectation of 7.5 million, and it was the lowest since September.
Uncertainty about the potential impact of trade tariffs on global economic growth, maintained the bearish sentiment in the oil futures market Tuesday.
The U.S. Dollar Index recovered from losses recorded in the previous trading session, increasing by 0.116 points to 98.905, as the U.S. President Donald Trump is expected to sign an executive order Tuesday to provide some relief from the 25% trade tariff imposed on all car imports and auto parts.
On April 9, the Trump administration announced a nine-day pause on the 10% reciprocal tariffs on imports from all countries but excluded the 25% auto tariffs.
