DTN Oil Update
Oil Futures Settle Higher; Worries About the Economy Persist
TACOMA, Wash. (DTN) -- Oil futures rebounded Tuesday following losses the previous session, which were driven by concerns over a possible U.S. recession this year amid the ongoing trade tariff disputes and their impact on economic growth.
After the front-month NYMEX WTI futures contract fell below the $66 bbl mark Monday, March 10, the crude benchmark price settled up 22cts at $66.25 bbl. Meanwhile, the ICE Brent futures contract for May delivery closed at $69.28 bbl, up $0.44. The April RBOB futures contract rose $0.0125 to settle at $2.1050 gallon, while April ULSD futures rose $0.0169 to $2.1968 gallon settlement.
The U.S. Dollar Index weakened further, dropping 0.693 to 103.260 against a basket of foreign currencies.
Oil futures have trended lower in recent weeks, and analysts expect that trend to continue as recession risks weigh on sentiment. Some analysts are forecasting a greater economic impact from the trade war than previously estimated, with tariffs initiated by the Trump administration putting pressure on consumer prices and domestic growth.
Last week, the Atlanta Federal Reserve projected U.S. GDP to contract 2.4% in the first quarter versus a 2.3% expansion reported in February.
Meanwhile, traders remain focused on U.S. tariffs imposed on China, Canada and Mexico, which could further affect global energy demand.
President Donald Trump announced Tuesday that the tariff rate on steel and aluminum imports from Canada and Mexico will increase from 25% to 50%, citing the need to protect domestic industries. This escalation in trade tensions has heightened concerns about the impact of tariffs on industrial costs and broader economic growth.
China is also expected to impose retaliatory tariffs ranging from 10% to 15% on multiple U.S. agricultural products this week in response to a 20% tax on Chinese goods enacted by the U.S. government.
On the economic front, the Bureau of Labor Statistics is scheduled to publish February inflation data Wednesday with expectations for a 3% year-over-year increase. U.S. consumer prices rose 0.5% in January, keeping the annualized inflation rate at 3%.
