MARKET WATCH: Oil prices slip as White House moves to impose tariffs on China

March 23, 2018
Oil prices slipped Mar. 22, down from recent gains amid fears of a trade war that could hamper economic growth. US President Donald Trump on Mar. 22 signed “a Presidential Memorandum targeting China’s economic aggression,” a move aimed at imposing $50 billion in tariffs. This, after new tariffs on steel and aluminum became effective Mar. 23.

Oil prices slipped Mar. 22, down from recent gains amid fears of a trade war that could hamper economic growth. US President Donald Trump on Mar. 22 signed “a Presidential Memorandum targeting China’s economic aggression,” a move aimed at imposing $50 billion in tariffs. This, after new tariffs on steel and aluminum became effective Mar. 23.

As for the steel tariffs, efforts are under way to mitigate the impact on the oil and gas industry. In a Mar. 23 industry note, Independent Petroleum Association of America Pres. and Chief Executive Officer Barry Russell told recipients that IPAA is working to develop comments to be shared with the US Department of Commerce about product exclusions.

“IPAA is meeting with the Trump administration and working with other trade associations to fully understand the steel tariffs product exclusion process and to recommend changes to ease the actions necessary to obtain exclusions,” Russell said.

The measures targeting China could also be impactful to the oil and gas industry as China is a large, if not the largest, potential source of future LNG demand growth.

For US Gulf Coast exporters, “Contracts with Chinese buyers may be off the table for the next wave of projects,” said Height Capital Markets energy investment analyst Katie Bays, according to a Mar. 19 Houston Chronicle report.

Energy prices

The May light, sweet crude contract on the NYMEX dropped 87¢ on Mar. 22 to settle at $64.17/bbl. The June contract settled down 77¢ to $64.18/bbl.

The NYMEX natural gas price for April dropped 2¢ to a rounded $2.62/MMbtu. The Henry Hub cash gas price fell 8¢ to $2.62/MMbtu on Mar. 22.

Ultralow-sulfur diesel for April dropped 2¢ to a rounded $1.95/gal.

Brent crude oil for May was down up 56¢ to $68.91/bbl on London’s International Commodity Exchange. The June contract was down 69¢ to $68.38/bbl. The gas oil contract for April was $606.50/tonne, down $4.50.

OPEC’s basket of crudes was $66.19/bbl on Mar. 22, up 80¢.