Oil Futures Slid Amid Tariffs Uncertainty
Maria Eugenia Garcia
DTN Energy Editor
HOUSTON, TX (DTN) -- Oil futures settled lower Tuesday due to concerns over
the impact that retaliatory trade tariffs on China, Canada and Mexico by the
United States, and their potential effects on global crude oil and refined
product prices.
The front-month NYMEX WTI futures contract saw a steep decline this morning
as it dropped by $2.48 to $70.68, but it rebounded to settle at $72.60, down by
56 cents compared to the previous trading session. Meanwhile, the April ICE
Brent futures contract edged up by 0.09% to $76.05 bbl.
The U.S. dollar index also recorded a significant drop, falling by 1.07% to
107.81 against a basket of foreign currencies.
Thin trading activity was reported in the oil futures market due to the
anxiety generated by the trade war led by the Trump administration. The
announcement of additional sanctions on Iranian crude also contributed to the
pressure on crude oil benchmarks.
On Feb. 1, the administration of President Donald Trum imposed a 25%
additional tariff on imports from Canada and Mexico and a 10% additional tariff
on imports from China last Saturday. But two days later, Trump announced a
30-day delay in the implementation of such tariffs on Canada and Mexico after
negotiations with the leaders of both countries.
Meanwhile, China today announced retaliatory tariffs on select American
imports and an antitrust investigation into Google as trade tariffs from the
U.S. took effect this day, according to an AP news report.
Downstream, March RBOB futures contract fell by $0.0224 to $2.0953 gallon
while, ULSD futures contract for March delivery dropped by $0.0408 to $2.0953
gallon.
Separately, Marathon Petroleum's refining and marketing segment reported the
fourth quarter adjusted EBITDA of $559 million, down from $2.2 billion for the
fourth quarter 2023 driven by lower market crack spreads. Refining operating
costs per barrel in the quarter reviewed were $5.26 bbl compared to $5.55 bbl
in the fourth quarter 2023.
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