Tariffs: President Trump will announce new tariffs on Wednesday, with immediate reciprocal duties on countries that tax U.S. goods and a 25% tariff on auto imports set for April 3. The administration is considering broad 20% tariffs, potentially raising $6 trillion for rebates to Americans, but trading partners like Canada have vowed retaliation. Economists warn these measures could increase prices, hurt economic growth, and further unsettle financial markets, which have already lost nearly $5 trillion in value since mid-February. Global manufacturing activity slowed in March as businesses rushed to ship goods before the tariffs take effect, but experts caution that any economic boost will be short-lived.
Venezuelan Oil Exports Drop: Venezuela's crude oil and fuel exports fell 11.5% in March due to new U.S. secondary tariffs and revoked licenses under the Trump administration, causing cargo suspensions and delays. The administration imposed a 25% tariff on buyers of Venezuelan crude and set a May 27 deadline for companies to cease operations, prompting China and India to suspend some shipments. Despite the decline, Venezuelan officials disputed the data, claiming exports rose 8.78% without providing evidence. Experts warn that if these sanctions persist, Venezuela's revenue will take a significant hit, though the country may attempt to bypass restrictions by rerouting crude through third countries.
API Stats: The DOE inventory report is set to be released at 9:30 AM CST, with analysts expecting a 2.1 million barrel decline in crude stocks, along with drops in gasoline (-1.9M) and distillates (-1.1M). Last week’s report showed a larger-than-expected 3.3 million barrel draw, bringing total crude inventories to 433.6 million barrels. Refinery utilization is estimated to have increased by 0.7 percentage points, indicating stronger demand for refined products. Markets will be watching for any deviations from expectations that could impact crude and refined product pricing.
Market Overview: Oil prices are steady this morning as traders await the U.S. tariff announcement, which could escalate trade tensions and impact demand. Concerns over potential secondary sanctions on Russian crude are adding some support, but overall market sentiment remains cautious. Meanwhile, U.S. crude inventories rose by an estimated 6 million barrels last week, while gasoline and distillate stocks saw slight declines, pointing to a mixed supply-demand outlook. Volatility is expected as the market reacts to the scope of the tariffs and broader economic risks.
WTI Daily Chart
WTI crude has been trading in a choppy range since December 2024, with recent price action showing a steady climb toward key resistance levels. The current price of $71.15 sits above the 14-day ($68.68) and 30-day ($68.72) SMAs, signaling short-term bullish momentum, while also trading just above the 100-day SMA ($70.69), which could act as near-term support. The RSI at 59.76 suggests that crude is approaching overbought conditions but remains below the 70 threshold, leaving room for further upside. A sustained move above $71.50-$72.00 could trigger additional buying, while downside support remains around $68.50.
Oil prices edged higher on Wednesday as traders braced for the U.S. tariff announcement, set to introduce new trade uncertainties and potential inflationary pressures. Despite a bearish U.S. crude inventory report showing a 6.2 million barrel build, the market largely dismissed the data, attributing the rise to increased Canadian crude imports. Investors also weighed concerns over potential secondary sanctions on Russian oil and heightened pressure on Iranian exports. Meanwhile, Mexico signaled it would not retaliate with counter-tariffs, easing some fears of a trade war. With crude prices stalling near recent highs, market focus has shifted from supply risks to the broader economic implications of new tariffs. The balance of risk remains tilted to the downside, with stronger-than-expected measures potentially triggering a sharp selloff.
