Trump’s tariff reveal shocks markets
April 3, 2025
The energy markets are down big to start out today, and we are seeing the market’sto first initial reaction to tariffs and OPEC+ news. It will take a few days to see how all this shakes out. President Trump revealed his tariff increases and the thought is that these are going to hurt the global economy and cause a decline in crude oil demand. Secondly, OPEC+ announced that not only are they going to move forward with their increase in the month of May, but they are going to increase their increase in May. Their original plan was to increase by 138,000 barrels per day, but they now plan to move it up to 411,000 barrels per day (bpd). These two items are the significant drivers that have the energy markets down big today.
The DOE inventory report had crude oil inventories up 6.17 million barrels this is the largest weekly build since January. Inventories are now at a 21.9-million-barrel deficit to their 5-year seasonal average. This deficit has reduced substantially from the middle of March (-34.5 million barrels). Cushing, Ok, had a big build of 2.37 million barrels. This reflects increased inflows and reduced outflows, with exports dropping by 4.9 million barrels in the week and refinery runs falling.
Gasoline inventories declined, continuing their draw down ahead of the summer driving season. Despite the recent declines, gasoline inventories are relatively balanced seasonally. Distillate inventories are now above the seasonal average by 50,000 barrels. Distillates did draw, but are in a good spot right now from an inventory perspective.
Propane had a build of 982,000 barrels putting total stocks at 44.141 million barrels and last year there were 51.810 million. Midwest supplies increased by 392,000 barrels, putting Midwest stocks at 9.432 million, and last year, there were 12.584 million. Gulf Coast stocks were up 808,000, putting total Gulf Coast stocks at 28.683 million, and last year, they were 31.1550 million.