DTN Oil Update
Oil Futures Rose, Despite Reciprocal Tariff Uncertainty
HOUSTON (DTN) -- Oil futures rose Friday morning, despite market participants assessing the potential impact of reciprocal trade tariffs on the U.S. economy and recent reports showing higher-than-expected inflation levels.
The front-month NYMEX WTI futures increased by $0.17 to $71.46 bbl while the April ICE Brent futures contract rose by $0.31 to $75.33 bbl. March RBOB futures contract was steady at $2.1107 gallon while ULSD futures contract for March delivery rose by $0.0020 to $2.4707 gallon.
The U.S. Dollar Index dropped by 0.62% to 107.60 against a basket of foreign currencies.
Thursday, Feb. 13, U.S. President Donald Trump instructed Commerce Secretary officials to review within 180 days the tariff system on a country-by-country basis, with the goal of imposing reciprocal tariffs on trading partners.
"The U.S. tariff on ethanol is a mere 2.5%. Yet Brazil charges the U.S. ethanol exports a tariff of 18%. As a result, in 2024, the U.S. imported over $200 million in ethanol from Brazil while the U.S. exported only $52 million in ethanol to Brazil," according to a statement released by the White House Thursday.
The 10% trade tariffs the United States has imposed on imported goods from China and 25% on aluminum and steel imports from Canada and Mexico in recent weeks, have raised concerns about the impact these actions could have on U.S inflation.
Friday morning, the U.S. Census Bureau reported retail sales were 0.9% lower in January from December, and 4.2% higher from January a year earlier, showing that high inflation prompted consumers to cut back on purchases.
The Bureau of Labor Statistics reported on Wednesday that the CPI rose 0.5% in January, bringing the annualized rate of inflation for the all-items index to 3.0%. January inflation was above the market expectation of 0.4%.
However, this week, Fed Chair James Powell stated that the Federal Reserve is not in a hurry to cut interest rates, as the economy remains strong.
Maria Eugenia Garcia can be reached at Maria.Garcia@dtn.com
