DTN Oil Update
Oil Futures Rose Despite a Hike on US Crude Stocks
HOUSTON (DTN) -- Oil futures rose on Thursday despite the American Petroleum Institute reporting an increase in U.S. crude inventories last week, amid volatility driven by trade tariffs proposed by the Trump administration and their potential impact on the global economy.
Commercial crude oil supply rose 1.0 million bbl during the week ended Jan. 17., while crude oil stocks at the Cushing, Oklahoma tank farm, the delivery point for NYMEX WTI, added 0.5 million bbl, the API said Wednesday, Jan. 22.
Meanwhile, gasoline inventory posted a build of 3.2 million bbl in the week ended Jan. 17 and distillate fuel supply rose 1.9 million bbl on the week.
Additionally, President Donald Trump's proposal to impose a 60% tariff on Chinese imports and 25% for products manufactured in Mexico and Canada has set a bearish tone in the oil futures market since he took office Monday, Jan. 20.
"While we expect the proposal to be used as a negotiating tactic, if enacted the tariffs would likely increase U.S. inflation and negatively impact productivity," Monica Guerra, head of policy at Morgan Stanley, said in a report. (https://www.morganstanley.com/…)
Analysts have anticipated a sticky inflation while the Federal Reserve last year said it will be more cautious about cutting interest rates this year.
"We are still forecasting three rate cuts for 2025 though. The jobs market is cooling and next month's annual benchmark revisions to non-farm payrolls could see significant cuts to the numbers originally reported. Wage pressures appear to be moderating quickly," said ING Research in a report Thursday.
The advance figure for seasonally adjusted initial jobless claims was 223,000 during the week ending Jan. 18, an increase of 6,000 from the previous week's unrevised level of 217,000, according to data released by the U.S. Department of Labor Thursday morning.
The figure was above the market's expectation of 221,000 claims.
The 4-week moving average was 213,500, an increase of 750 from the previous week's unrevised average of 212,750, the same data showed.
The NYMEX WTI futures contract for February delivery rose by $0.18 to $75.62 bbl while the March ICE Brent futures contract edged up by $0.18 to $79.18 bbl. The RBOB futures contract for February delivery increased by $0.0027 to $2.4869 gallon while February ULSD futures rose by $0.0104 to $2.0682 gallon.
The U.S. Dollar Index rose by 0.06% to 108.020 against a basket of foreign currencies.
Maria Eugenia Garcia can be reached at Maria.Garcia@dtn.com