DTN Oil Update
WTI Rebounds on Tariffs, OPEC Outlook; But Stays Below $60
SECAUCUS, N.J. (DTN) -- Crude prices rebounded from 5-month lows on Monday following the Trump administration's decision to dial back threats to impose massive new tariffs on China. OPEC's decision to maintain its forecast for steady oil global demand in 2026 also contributed to the bullish sentiment.
However, oil futures gains were capped by peace prospects in the Middle East after Hamas freed 20 surviving Israeli hostages on Monday under a U.S.-brokered ceasefire deal. This could further reduce the geopolitical risk premium for oil; but caution prevails as the U.S. continues increasing oil production to keep supply-demand in balance.
However, Monday's hike was capped on concerns that U.S producers were continuing to produce more oil than necessary to keep supply-demand in balance.
P[L1] D[0x0] M[300x250] OOP[F] ADUNIT[] T[]
The NYMEX WTI crude futures contract for November rose $0.80 barrel (bbl) to $59.70, settling the day below the $60 bbl level critical to the psychological confidence of market bulls. WTI did get to a session peak of $60.17 before slipping back.
ICE Brent for December delivery gained $0.80 to $63.53 bbl, after a session high at $63.95 versus Friday's 5-month low of $62.52. Brent's needs to climb back above $65 to regain its bullish trajectory.
Downstream, November RBOB gasoline futures advanced $0.0291 to $1.8495
gallon, and front-month ULSD futures rose $0.0509 to $2.2553 gallon.
The U.S. Dollar Index strengthened, up 0.253 points to 98.985 against a
basket of foreign currencies.
On Monday, OPEC kept unchanged its demand growth forecast at 1.4 million barrels per day (bpd) for 2026, while raising its outlook for 2025 demand by 100,000 bpd to 1.3 million bpd.
The market reacted positively to the OPEC forecast even as it put the group at odds with forecasting agencies like the U.S. Energy Information Administration and the International Energy Agency that have turned increasingly pessimistic about oil demand growth in 2025.
So far this year, the Trump administration has levied punitive trade tariffs averaging more than 50% on Chinese imports, while China, the world's second-largest oil crude oil importer, has responded with retaliatory tariffs averaging just over 30% on U.S. imported goods. On Sunday (10/12) though, Trump dialed back on his new tariff threats.