DTN Oil Update
Oil Futures Slide as Tariff War Deepens Market Uncertainty
TACOMA, Wash. (DTN) -- Oil futures settled lower Thursday, with benchmark contracts extending losses amid continued uncertainty related to trade tariffs. The market moved downward following the implementation of expanded U.S. and Chinese tariffs and the newly announced 90-day pause on certain reciprocal tariffs affecting non-retaliatory countries.
The front-month NYMEX WTI crude contract for May delivery settled at $60.29 bbl, down $2.06 from Wednesday's settle of $62.35 bbl. ICE Brent crude for June delivery settled at $63.54 bbl, a decrease of $1.94 from the previous settle of $65.48 bbl.
May RBOB gasoline futures settled at $1.9678 gallon, a drop of $0.0706 from Wednesday's settle of $2.0384 gallon. The front-month ULSD contract settled at $2.0545 gallon, down $0.0591 from $2.1136 gallon the previous session.
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The U.S. Dollar Index settled at 100.845, down 1.788 points from Wednesday's close of 102.623.
The U.S. Bureau of Labor Statistics reported Thursday that the Consumer Price Index (CPI) declined by 0.1% in March, following a 0.2% increase in February. Over the past 12 months, the all-items index rose by 2.4%. The energy index declined by 2.4% in March, including a 6.3% drop in the gasoline index, offsetting increases in electricity and natural gas.
However, despite the inflation data for March being below the market expectation of a 0.1% increase, the oil futures market continued focused on the escalating trade war between U.S. and China and its potential impact on global oil demand.
"Lingering demand growth concerns have already led to neutral to bearish outlooks and calls for a balanced to slightly oversupplied market in 2025. The implementation of a 10% across-the-board import tax, combined with a 125% tariff on imports from China and China's retaliatory measures are fueling global recession fears," said Karim Bastati, analyst for DTN Energy.
The United States raised tariffs on Chinese imports to 125% on Wednesday, April 9, following U.S. President Donald Trump's announcement of an additional 84% levy on top of earlier tariff rounds of 10% enacted in February and March. In response, China's Customs Tariff Commission announced it would raise tariffs on U.S. goods from 34% to 84%, effective Thursday.
At the same time, the Trump administration announced a 90-day pause on reciprocal tariffs for most other countries, reducing those tariffs to a flat 10% during negotiations. The pause does not apply to China. Sector-specific tariffs, including those on automobiles, remain in effect.
However, the uncertainty surrounding the tariff war maintains bearish sentiment in the oil futures market, which has caused the two main crude oil benchmarks to hit their lowest levels in four years.
The Energy Information Administration lowered Thursday its estimates for WTI and Brent crude average prices for 2025 and 2026 due to uncertainty about global oil demand growth, ample supplies from OPEC+ additional output, and the effects of trade tariffs.
The EIA estimated an average price for WTI at $64 bbl during 2025, down from a previous estimate of $71 bbl, and $57 bbl for 2026, lower than the prior forecast of $65 bbl.
For Brent, the EIA predicted an average price of $68 bbl in 2025, down from a previous forecast of $74 bbl, and a fall to an average price of $61 bbl in 2026, from a previous estimate of $68 bbl, according to its monthly Short-Term Energy Outlook (STEO) report released Thursday.
