DTN Oil Update
Oil Futures Gain, Recovering From Multi-Week Losses
HOUSTON (DTN) -- Oil futures settled higher to start the week Monday, gaining over $1 on the day after reversing losses recorded in the past three weeks due to concerns on trade tariffs that the Trump administration imposed on imported goods from China last week.
The front-month NYMEX WTI futures contract rose by $1.43 to $72.43 bbl and the April ICE Brent futures contract climbed by $1.32 to $75.98 bbl. March ULSD futures contract rose by $0.0234 to $2.4542 gallon while RBOB futures contract for March delivery were almost flat at $2.1047 gallon.
The U.S. Dollar Index rose by 0.29% to 108.215 against a basket of foreign currencies.
The bullish sentiment was also supported by expectations of tight global supplies due to additional sanctions on Russian and Iranian oil trade.
Last week, the Department of the Treasury announced sanctions on an international network for facilitating the shipment of millions of barrels of Iranian crude oil worth hundreds of millions of dollars to China, as part of the Trump administration's aims to reduce Iran's oil exports to zero.
Last week, the market reacted negatively to the announcement of a 10% tariff on Chinese imports. Additionally, the one-month delay on retaliatory tariffs over imports from Canada and Mexico contributed to the uncertainty regarding the potential impact of those actions on the U.S. economy, particularly with respect to inflation.
Analysts anticipate that the Federal Reserve will keep interest rates unchanged until there is more clarity about the economic implications of tariffs in the coming weeks.
Federal Reserve Chair Jerome Powell is scheduled to testify in Washington and respond to questions from legislators of both parties about the U.S. economic situation. This will be his first testimony under President Trump's second term.
On Wednesday, Feb. 12, the market will be focused on the release of the Consumer Price Index for January, which is expected to be around 2.8%, compared to 2.9% recorded in December.
Maria Eugenia Garcia can be reached at Maria.Garcia@dtn.com
