Crude prices slide on tariff uncertainty
April 2, 2025
Crude oil prices were down slightly but refined product prices were up in yesterday’s trading. The fall in prices is mainly driven by uncertainty as the US tariffs planned to be announced today. Canadian oil (10%) and Mexican oil (25%) imports are expected to be less and cause supply to fall in the US along with Venezuelan oil ‘s new tariffs impacted those supplies. But the tariffs are also likely to destroy oil demand, and the markets are trying to weigh all this out.
The API inventory estimate had crude oil inventories up 6 million barrels, gasoline inventories were down 1.6 million barrels and distillates down 11,000 barrels. If the market gets a crude build like that today in the DOE report will get a push below $70.
The estimate for today’s propane inventory update is for supplies to be down 240,000 barrels.
It has been reported that a new OPEC meeting was scheduled for tomorrow in which they will reiterate compliance with quotas as well as compensation cuts.
Several refineries have reported to be going down on maintenance which could impact today’s inventory stats.
On the refined fuels products, the overriding sentiment is that if tariffs are announced and they are placed on Canadian energy specifically then prices will rally. If there are no tariffs on Mexican energy, but Canada gets included this could be bearish for gasoline as more gas would stay in the US and not exported to Europe. How this shakes out, no one knows, and it should lead to volatility here in the near term.
The average estimates for today’s DOE inventory report from the Bloomberg survey are for crude oil supplies to be down 448,000 barrels, gasoline down 1.520 million barrels and distillates down 407,000 barrels.
President Trump is supposed to make his announcements later this afternoon from the White House Rose Garden.