DTN Oil Update
Oil Futures Dip Amid US Tariff Threats on Russia
HOUSTON (DTN) -- Oil futures reversed earlier gains on Monday after U.S. President Donald Trump threatened Russia with 100% secondary tariffs if an agreement to end the war in Ukraine is not reached in 50 days. Trump also confirmed that the U.S. will send weapons to NATO to help Ukraine defend itself from Russian attacks.
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The front-month NYMEX WTI futures contract fell by $1.35 to $67.10 bbl after hitting $69.65 bbl early in the morning, while the ICE Brent futures contract for August delivery decreased by $1.05 to $69.31 bbl.
Downstream, August RBOB gasoline futures contract slid by $0.0186 to $2.1684 gallon, and the front-month ULSD futures contract fell $0.0622 to $2.3852 gallon.
In contrast, the U.S. Dollar Index strengthened by 0.246 points to 97.820 against a basket of foreign currencies.
The announcement of additional sanctions on Russia came during a meeting with NATO officials at the White House today. Trump's statements also came just two weeks after the U.S. halted military aid shipments to Ukraine -- aid that had been committed by the previous administration -- in what was the latest sign of the White House's newfound more hawkish stance on Russia.
Market participants will focus on the June Consumer Price Index (CPI) data to be released Tuesday morning, as analyst have predicted a higher inflation index due to increased tariffs imposed by the Trump administration on China, Canada and Mexico, and other trade partners in recent months.
On Saturday, July 12, the Trump administration announced 30% trade tariffs against Mexico and the European Union effective on Aug. 1.
"So far, Trump has warned the European Union and 24 nations, including major trading partners like South Korea and Japan, that steeper tariffs will be imposed starting August 1," the AP reported during the weekend.
