DTN Oil Update

Barani Krishnan
DTN Refined Fuels Market Reporter

SECAUCUS, N.J. (DTN) -- Crude futures hit five-month lows on Friday, Oct. 10, after U.S. President Donald Trump threatened a "massive increase" in tariffs on China as the Chinese government restricted rare-earth exports.

So far this year, the Trump administration has levied punitive trade tariffs averaging over 50% on Chinese imports, while China has responded with retaliatory tariffs averaging just over 30% on U.S. imported goods. China is the world's second-largest oil buyer.

"One of the Policies that we are calculating at this moment is a massive increase of Tariffs on Chinese products coming into the United States of America," Trump wrote on his Truth Social platform.

The announcement sent the NYMEX WTI futures contract below the key $60 bb psychological support. The U.S. oil benchmark for November delivery closed down $2.61 at $58.90 bbl, after an intraday low at $58.70 -- a bottom not seen since May 8. The more than 4% drop on the day was also the sharpest since June.

ICE Brent for December delivery dropped $2.54 to $62.68 bbl after a five-month low at $62.52.

Downstream, November RBOB gasoline futures declined $0.0637 to $1.8189 gallon, and front-month ULSD futures slumped $0.0779 to $2.2024 gallon.

The U.S. Dollar Index, which typically moves opposite to commodities, also was down 0.550 to 98.735.