DTN Oil Update
Oil Futures Fall Amid Tariffs War Concerns
HOUSTON (DTN) -- Crude oil futures dropped on Thursday, despite a draw on U.S. oil crude and fuels inventories last week, amid concerns about the potential impact of additional tariffs to be announce next week on the global economic growth.
The oil futures market reversed gains seen in the last trading sessions due to the escalation of the trading war after U.S. President Donald Trump announced Wednesday, March 26, that his government would impose a 25% tariff in car and auto part imports starting next week, an action aimed at boosting domestic production. In 2024, Mexico was the top car exporter to the U.S. market, followed by Japan, South Korea, Canada and Germany, among others.
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Most executives from 130 oil and gas firms expect the West Texas Intermediate crude oil price to end 2025 at $68 bbl driven in part by the uncertainty generated by the Trump administration with its tariffs policy, according to the quarterly Dallas Fed Energy Survey released Wednesday.
April 2 marks the beginning of additional tariffs that the United States is expected to impose on China, Canada, Mexico and the European Union, all of which have responded with retaliatory tariffs as well.
Separately, the American Petroleum Institute and the Energy Information Administration reported a steep drop in U.S. fuels inventory last week, which contributed to a bullish tone in the oil futures market in the previous trading sessions.
The EIA reported Thursday that U.S. commercial crude oil inventories dropped by 3.3 million bbl to 433.6 million bbl in the week ending March 21, despite increased refinery activity. The figure was below the 4.6 million bbl inventory draw reported by API on Monday, March 25 for the same reference week.
Downstream, total motor gasoline inventories decreased by 1.4 million bbl to 239.1 million bbl in the reference week, 2% above the five-year average.
Distillate fuel stocks fell 400,000 bbl to 114.4 million bbl in the reference week, which was 7% below the five-year average.
The API reported that gasoline supply decreased by 3.3 million bbl, and distillate fuel supply declined by 1.3 million bbl last week.
The front-month NYMEX West Texas Intermediate futures contract for May delivery edged down by $0.06 to $69.59 bbl, while the May ICE Brent futures contract fell by $0.13 to $73.66 bbl. The April RBOB futures contract decreased by $0.0017 to $2.2311 gallon, and April ULSD futures declined by $0.0101 to $2.2786 gallon.
The U.S. Dollar Index fell by 0.16% to 104.05 against a basket of foreign currencies.
