DTN Oil Update

Maria Eugenia Garcia
DTN Energy Editor

HOUSTON (DTN) -- Crude oil futures edged up Tuesday morning ahead of the implementation of sweeping trade tariffs by the United States on all countries Wednesday, April 2, and supported by expectations of secondary sanctions on Russian oil trade expected to be imposed by the Trump administration.

The front-month NYMEX West Texas Intermediate futures contract for May delivery slightly rose by $0.16 to $71.64 bbl while the May ICE Brent futures contract inched up by $0.11 to $74.88 bbl. The April RBOB futures contract rose by $0.0078 to $2,2985, while the front-month ULSD futures contract rose by $0.00731 to $2.2867 gallon.

The U.S. Dollar Index continued climbing, fueled by trade tariffs, increasing 0.82% to 103.97 against a basket of foreign currencies.

Wednesday marks the deadline for U.S. President Donald Trump to unveil reciprocal tariffs on all countries trading with the United States. The Trump administration has already 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 uncertainty about the effects of these tariffs on global economic growth has reignited concerns about a potential recession in the United States, which continues to face inflationary pressures.

The bullish sentiment in the oil futures market also has been supported by a drop in U.S. crude and fuels inventories reported last week and by expectations of additional secondary sanctions on Russian oil trade, after President Trump stated that Russia's President Vladimir Putin has failed to reach an agreement with Ukraine regarding a ceasefire.

Putin called for the removal of Ukrainian President Volodymyr Zelensky and reiterated his intention to continue the war with Ukraine, just days after pledging in a long call with President Trump his commitment to pause attacks on Ukrainian energy infrastructure.

In recent weeks, the U.S. implemented stricter sanctions on Iran and Venezuela oil trade, aimed at reducing their oil exports to zero. However, limited supplies of Russian, Iranian and Venezuelan oil are expected to be offset by 2.2 million bbl of additional oil output from OPEC+ countries scheduled to start Wednesday as well.