DTN Oil Update
Oil Futures Mixed on Tariffs Concerns, Crude Stocks Build Last Week
HOUSTON (DTN) -- Crude oil futures were mixed Thursday morning as uncertainty persists about the tariff war impact on the global economy, coupled with expectations of ample supplies as OPEC+ plans to increase oil output in April and reports of a higher-than-expected build in U.S. crude inventories last week.
The NYMEX WTI futures contracts for April delivery rose by $0.37 to $66.68 barrel (bbl) while the front-month ICE Brentâ?¯edged up by $0.26 to $69.59 bbl. The RBOB futures contract for April delivery dipped $0.0050 to $2.1320 gallon and the April ULSD futures contract rose by $0.0066 to $2.2474 gallon.
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The U.S. Dollar Index fell by .29% to 103.96 against a basket of foreign currencies.
Market participants continue to focus on the developments of the trade war initiated by the U.S. government against its main trade partners China, Canada and Mexico, which has caused the two crude oil benchmarks to reach their lowest level since November this week
As a result of the uncertainty caused by trade tariffs, Golman Sachs this week cut its price forecast for Brent crude by $5 to $70 bbl for the second quarter and $67.50 bbl for the third and fourth quarters.
The United States levied an extra 10% tariff on imported goods from China, and 25% on imports from Canada and Mexico starting March 4, causing immediate retaliatory tariffs of 15% and 25%, from China and Canada respectively. Mexico is expected to announce a retaliatory tax on Sunday.
Separately, the EIA reported Wednesday, March 5, that the commercial crude oil inventories in the U.S. increased by 3.6 million bbl to 433.8 million bbl last week. This was larger than a 1.455 million bbl build reported by API the previous day for the same reference week. API also noted that supplies at the Cushing, Oklahoma, tank farm, the delivery point for NYMEX WTI futures, rose 1.630 million bbl last week.
Gasoline stocks fell by 1.4 million bbl, week-over-week, reaching 246.8 million bbl, in the week ended Feb. 28. This was below 1.249 million bbl drop reported by API for the same period.
Distillate fuel stocks fell 1.3 million bbl to 119.2 million bbl last week, according to EIA, the figure was below the 1.136 million bbl build API reported for the same week.
The EIA report put additional pressure on oil futures prices, which are expected to remain bearish after this week, when OPEC+ confirmed their decision to gradually increase 2.2 million bpd its global output starting April 1.
