DTN Oil Update
Oil Futures Rise Despite Anxiety Surrounding Tariffs
HOUSTON (DTN) -- Oil futures reversed earlier losses on Thursday, driven by a decline in oil crude and fuel inventories recorded last week, amid anxiety surrounding the announcement of additional trade tariffs from the United States on its trade partners next week.
The escalation of the trade war created a bearish sentiment early in the morning, one day after U.S. President Donald Trump announced the implementation of a 25% tariff in car and auto part imports starting next week, aimed at boosting domestic production.
The unexpected decision comes just days before the April 2 deadline set by the Trump administration to impose additional tariffs on imports from China, Canada, Mexico and the European Union, all of which have responded with retaliatory tariffs as well.
Meanwhile, crude oil futures showed moderate gains Thursday driven by the Energy Information Administration data showing a 3.3-million-barrel draw in U.S. commercial crude oil inventories in the week ending March 21. This was the first drop in 10 weeks -- and the largest since December -- placing inventories at 433.6 million bbls, down 14.6 million bbls, or 3.3%, year-on-year.
The figure was below the 4.6 million bbl inventory draw reported by API on Monday, March 25 for the same reference week.
Gasoline inventories decreased by 1.4 million bbl to 239.1 million bbl in the reference week, 2% above the five-year average. Distillate fuel stocks fell 400,000 bbl to 114.4 million bbl in the reference week, which was 7% below the five-year average.
The front-month NYMEX West Texas Intermediate futures contract for May delivery edged up by $0.27 to $69.92 bbl, finding again resistance to reach the $70 mark. The May ICE Brent futures contract rose by $0.25 to $74.04 bbl. The April RBOB futures contract rose by $0.0122 to $2.2450 gallon, in contrast, the front-month ULSD futures contract dropped by $0.0042 to $2.2845 gallon.
The U.S. Dollar Index fell by 0.12% to 103.99 against a basket of foreign currencies.
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