Oil Futures Drop on Resurgence of Tariff Concerns
7/10 2:54 PM
Oil Futures Drop on Resurgence of Tariff Concerns HOUSTON, TX (DTN) --Oil futures fell on Thursday amid ample supply fundamentals and trade tension after U.S. President Donald Trump threatened to impose a 50% tariff on all goods imports from Brazil by August 1. The announcement signaled a return to protectionist policies, setting a bearish tone in the oil futures market. Earlier in the week, the White House notified 22 trading partners of new tariffs set to take effect August 1, dismissing the possibility of another extension of the August 1 tariff deadline. On Tuesday, Trump announced a 50% tariff on copper imports into the U.S. and a 25% tariff on pharmaceuticals and semiconductors. While markets have become less reactive to tariff announcements by the Trump administration, recent rhetoric has reignited concerns over a potential shift toward a hawkish, high-tariff trade policy. Higher tariffs are set to curb oil demand growth at a time when OPEC plans to significantly ramp up production, elevating global oversupply concerns. Eight member states shouldering some 2.2 million bpd in voluntary production cuts, in place since 2023, aim to fully unwind those by the end of September. Downward pressure in the oil futures market was also supported by U.S. Energy Information Administration data released yesterday (7/9), showing that domestic commercial crude oil stockpiles surged the most since January. The EIA reported crude oil inventories surging by 7.1 million barrels last week, marking the largest weekly build since January. In contrast, sizable draws to gasoline and diesel inventories partially eased the bearish effect of this surprising jump in crude oil stockpiles. The front-month NYMEX WTI futures contract dropped by $1.51 to $68.87 bbl, while the September ICE Brent futures contract fell by $1.31 to $70.19 bbl. Downstream, August RBOB futures contract edged down by $0.0309 to settle at $2.1575 gallon while the ULSD futures contract for August delivery fell by $0.0142 to $2.3951 gallon. In contrast, the U.S. dollar strengthened by 0.106 points to 97.300, compared to a basket of foreign currencies. (c) Copyright 2025 DTN, LLC. All rights reserved.