DTN Oil Update
Oil Futures Fall Due to Trade War Anxiety
HOUSTON (DTN) -- Oil futures remained bearish Wednesday morning, driven by the uncertainty surrounding the trade tariff war initiated by the Trump administration, coupled with expectations of ample supplies due to an output hike from OPEC+ starting April.
The NYMEX WTI and ICE Brent futures contracts for May delivery fell by $1.75 at $66.51 bbl while the front-month ICE Brent dropped by $1.46 to $69.58 bbl. The RBOB futures contract for April delivery dipped $0.0658 to $2.1284 gallon and the April ULSD futures contract rose by $0.0636 to $2.2236 gallon.
The U.S. Dollar Index continued its downward trend, by decreasing -0.98% to 104.64 against a basket of foreign currencies, hitting its lowest level since November.
Tuesday, March 4, the United States imposed a 25% tax on imported goods from Canada and Mexico, in addition to the 25% tariff on aluminum and steel imports from both countries levied in February. The Trump administration also imposed an extra 10% tariff on imported goods from China. China and Canada responded with immediate retaliatory tariffs of 15% and 25%, respectively, while Mexico is expected to announce a retaliatory tax on Sunday.
These actions continue to raise fears of escalating prices for U.S. consumers and inflationary pressures. The bearish sentiment in the oil futures market is also fueled by expectations of ample crude supplies following OPEC's decision this week to gradually increase 2.2 million bpd its global output starting April 1.
Separately, the American Petroleum Institute reported Tuesday, commercial crude oil supply dropped 1.455 million bbl in the week ending Feb. 28. API reported also that the supply at the Cushing, Oklahoma tank farm, the delivery point for NYMEX WTI futures, rose 1.630 million bbl.
Meanwhile, gasoline supply fell 1.249 million bbl in the week profiled while distillate fuel supply rose 1.136 million bbl.
