Steel and Aluminum Tariffs: President Trump implemented a 25% global tariff on steel and aluminum products entering the United States this morning as the administration continues its pursuit to switch up global trade flows. Retaliatory tariffs were already implemented by the European Union on the United States - impacting $28 billion worth of U.S. goods imported to Europe. Japanese officials also stressed that the tariff will impact American-Japanese relationships. The countries most impacted by the tariffs are Canada, Brazil, Mexico and South Korea, which all had enjoyed exemptions or quotas up until this action.
U.S. Dollar: The Dollar fell to fresh lows yesterday, down 0.5% during the session on trade and economy concerns. The easing dollar offsets the bearish sentiment supporting prices on energy, though according to some analysts the support seems to be short lived. Markets worry that the trade war will have a detrimental effect on economic growth as businesses struggle to absorb extra costs in the supply chain, increasing inflation, and undermining consumer confidence.
U.S. Inflation Data: Consumer price data is set to be released today, which investors will use as an indicator on what interest rates may do later this year. Cooling inflation has decreased interest rates in recent years, after inflation globally spiked in the wake of the COVID-19 crisis. Overall sentiment seems fragile at this point, and disappointment with inflation information could continue to send markets lower.
Market Overview: Energy futures are once again starting the day out slightly higher as a weaker dollar continues to have effect on petroleum futures. Important economic and market data are set to be released today including U.S. inflation data as well as product inventories. Yesterday, API released estimates showing builds on crude oil and distillate inventory with a draw on gasoline stocks.
US Rig Count
The amount of oil and gas rigs active in the United States have seen consistent levels since 2023 in the country. Oil rigs last week were at 486 while gas rigs were at 101 units bringing the total to 592. Last week, producers cut oil and gas rigs for the first time in 6-weeks, though the move lower impacted one gas rig. Total rig count was off 30% compared to the year prior.
Petroleum futures rose in the session today as DOE data showed larger than expected draws on crude and distillate inventories. Continued concerns around a U.S. economy slowdown and tariff impacts on global economic growth had kept a lid on the bullish inventory data. Crude stockpiles rose 1.4 million bbl while distillate, less than expected. Distillate inventories drew down 1.6 million bbl as opposed to a small 400k bbl build forecasted by API. Gasoline inventories drew down 5.7million bbl, also more than expected ahead of the data release. U.S. Consumer price data also gave some relief to markets, reflecting signs of cooling inflation as prices softened during the month of February. However, recent tariff spats between large global economies are likely to undermine improvements on these values. The dollar also has been supporting petroleum prices, as the currency hovers near five-month lows.
