DTN Oil Update

Oil Futures Rose, Traders Eye OPEC Meeting, Trade Tariffs

HOUSTON (DTN) -- Oil futures edged up Thursday despite mixed economic data showing lower-than-expected GDP growth, a drop in unemployment claims, and concerns about the outcome of next week's OPEC meeting.

Oil futures markets remained almost steady on the day as traders discounted the impact of U.S. economic data and adopted a wait-and-see approach ahead of the OPEC meeting scheduled for Feb. 3.

Expectation was growing about the oil cartel's response to President Donald Trump's demand to lower global crude prices after the president claimed this could help end the war in Ukraine.

In its December meeting, OPEC agreed to extend production cuts of 1.65 million bpd until the end of March and 2 million bpd until December 2026 due to weak demand from China and ample supplies.

However, if OPEC shifts its decision, oil futures will be under pressure, as weak global oil demand persists, amid the uncertainty generated by the possibility of trade tariffs being imposed on imported goods from Canada and Mexico starting on Feb. 1.

President Trump reiterated today that the United States will impose a 25% trade tariff on imported goods from its two main trade partners, Canada and Mexico, according to media reports.

The announcement helped the U.S. dollar index recover from earlier losses, climbing by 0.15% to 107.960 against a basket of foreign currencies.

Separately, real GDP increased at a 2.3% annualized rate in the fourth quarter of last year, compared to 3.1% in the prior quarter, the Bureau of Economic Analysis reported today. The increase was below the market expectation of a 2.5% rise.

In contrast, seasonally adjusted initial unemployment claims fell by 16,000 to 207,000 claims in the week ending Jan. 25, compared to the prior week, according to Department of Labor data released this morning. The market consensus was 228,000.

The front-month NYMEX WTI futures contract rose by $0.46 to $73.08 bbl, and the March ICE Brent futures contract was $77.07 bbl, up by $0.49. February RBOB futures contract climbed by $0.0110 to $2.0467 gallon, while the ULSD futures contract for February delivery rose by $0.0345 to $2.4885 gallon.

The U.S. Dollar Index rose by 0.15% to 107.960 against a basket of foreign currencies.

Maria Eugenia Garcia can be reached at Maria.Garcia@dtn.com