DTN Oil Update
Oil Futures Climb, WTI Trades at $71 Due to Trade War Concerns
HOUSTON (DTN) -- Crude oil futures rallied to start the week on Monday ahead of the April 2 deadline set by the Trump Administration to impose sweeping trade tariffs on all countries.
The front-month NYMEX West Texas Intermediate futures contract for May delivery rallied Monday after increasing by $2.11 to $71.47 bbl, the highest increase since Feb. 19. The May ICE Brent futures contract climbed by $1.11 to $74.74 bbl. In the refined products markets, the April RBOB futures contract rose by $0.0484 to $2.2831 gallon, while the front-month ULSD futures contract rose by $0.0531 to $2.3140 gallon.
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Market participants continue awaiting U.S. President Donald Trump's unveiling of punitive trade tariffs on Wednesday, which will be imposed on all countries trading with the United States. In the last two months, the Trump administration has levied 20% tariffs on imports from China, 25% on steel and aluminum from Canada and Mexico, 25% on imported goods from the European Union, and 25% on foreign car imports.
The bullish sentiment in the oil futures market has been also fueled by expectations of additional sanctions on Russian oil trade, as President Trump considers that Russia's President Vladimir Putin has failed to reach an agreement with Ukraine regarding a ceasefire.
On Friday, Putin called for the removal of Ukrainian President Volodymyr Zelensky and his intention to continue the war with Ukraine, according to media reports. This contradicts Putin's recent pledge to President Trump to pause on the attacks on energy infrastructure in Ukraine.
In recent weeks, the U.S. implemented stricter sanctions on Iran and Venezuela oil trade, aiming to reduce their oil exports to zero.
However, limited supplies of Russian, Iranian and Venezuelan oil could be compensated by additional supplies from OPEC+ countries.
On Wednesday, eight OPEC+ countries (Saudi Arabia, Russia, Iraq, the United Arab Emirates, Kuwait, Kazakhstan, Algeria, and Oman) are scheduled to start a gradual increase of 2.2 million bpd in global output.
Separately, the U.S. Dollar Index also rose, driven by expectations of upcoming trade tariffs by rising 0.16% to 103.87 against a basket of foreign currencies.
