DTN Oil Update
Oil Futures Rose Despite Prevailing Tariff Concerns
HOUSTON (DTN) --â?¯Oil futures climbed higher Monday after hitting their lowest level following the announcement of higher-than-expected build on crude and gasoline stocks in the week ended Jan. 31, despite the uncertainty fueled by the trade tariff war led by the Trump administration.
Oil futures moved to bullish ground Monday morning, reversing multi-day losses experienced over the past three weeks due to concerns on trade tariffs the Trump administration imposed on imported goods from China last week.
The one-month delay on retaliatory tariffs over imports from Canada and Mexico contributed also to the uncertainty regarding the potential impact of those actions on the U.S. economy, particularly with respect to inflation.
U.S. President Donald Trump is expected to announce on Monday "the United States will impose 25% tariffs on all steel and aluminum imports, including from Canada and Mexico and other import duties later in the week," the AP reported.
Trump is also expected to announce "reciprocal tariffs"-- "probably Tuesday or Wednesday," which means the U.S. would impose import duties on products in cases in which another country has levied duties on U.S. goods, as reported by the AP.
Analysts anticipate that the Federal Reserve will keep interest rates steady until there is more clarity about the economic implications of tariffs in the coming weeks.
On Wednesday, 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.
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 "maximum pressure" campaign against Iran, aiming to reduce its oil exports to zero.
Additional sanctions on Russian and Iranian crude are expected to put upward pressure on global oil prices due to expectations of tight supplies.
The front-month NYMEX WTI futures contract rose by $0.84 to $71.84 barrel (bbl) while the April ICE Brent futures contract increased by $0.81 to $75.47 bbl. March RBOB futures contract rose by $0.0036 to $2.1086 gallon while ULSD futures contract for March delivery increased by $0.0200 to $2.4508 gallon.
The U.S. Dollar Index rose by 0.20% to 108.130 against a basket of foreign currencies.
Maria Eugenia Garcia can be reached at Maria.Garcia@dtn.com
