DTN Oil Update
Oil Extends Losses on US GDP Contraction, Growth Concerns
VIENNA (DTN) -- Oil futures extended losses Wednesday morning as worries over economic growth took center stage after the first estimate of U.S. GDP growth in the first quarter of 2025 pointed to an economic contraction.
NYMEX-traded WTI for June delivery was down $0.94 bbl to trade near $59.48 bbl, and ICE Brent for June delivery fell $0.93 bbl to $63.32 bbl.
May RBOB gasoline futures declined $0.0203 to $2.0509 gallon, while the front-month ULSD futures contract shed $0.0331 to $2.0873 gallon.
The U.S. Dollar Index strengthened by 0.322 points to 99.365.
The preliminary estimate released by the Bureau of Economic Analysis Wednesday morning showed the U.S. economy contracting by 0.3% in the first quarter of 2025 compared to Q4 2024. BEA cited an increase in imports -- likely tied in part to companies filling inventories ahead of anticipated tariffs -- and a decrease in government spending as the main drivers of GDP contraction.
Growth estimates have been revised sharply downward because of new U.S. trade policies, especially those concerning high import tariffs on Chinese goods. The Federal Reserve Bank of Atlanta's final estimate for first quarter GDP growth released Tuesday was -2.5% quarter-on-quarter, and -1.5% according to the gold-adjusted alternative model. The bank will release its first estimate for second quarter GDP growth at 1 p.m. EDT Wednesday.
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