MARKET WATCH: Crude oil futures continue falling in New York, London

March 2, 2018
The light, sweet crude oil contract for April dropped to a 2-week low on Mar. 1. Analysts said crude oil prices were under downward pressure from proposed US steel import tariff changes, volatile equity markets, a strengthening US dollar, and growing US oil supplies and production.

The light, sweet crude oil contract for April dropped to a 2-week low on Mar. 1. Analysts said crude oil prices were under downward pressure from proposed US steel import tariff changes, volatile equity markets, a strengthening US dollar, and growing US oil supplies and production.

President Donald Trump on Mar. 1 announced he intends to impost steep tariffs on US steel and aluminum imports (OGJ Online, Mar. 2, 2018).

He Ming, Wood Mackenzie Ltd. senior manager, said US steel imports last year totaled 35.6 million tonnes, around 36% of US consumption and equivalent to about $17.6 billion.

US trading partners likely to be most negatively affected will be Canada, Mexico, Brazil, and South Korea, Ming said. China accounted for about 3% of the total and is unlikely to be affected that much.

South Korea has filed a complaint with the World Trade Organization over five US steel anti-dumping duties and countervailing measures. If the US chooses one of the proposed protection measures, that will trigger a wave of similar complaints, Ming said.

“We think the steel tariffs will not solve the underlying problem of high cost of [US] steelmaking,” Ming said, adding US steel end users are searching for cheaper imports. The proposals’ “intention to protect employees in the steel and aluminum sectors will be offset by more job losses in the metal-intensive industries such as car manufacturers.”

Energy prices

The April light, sweet crude contract on the NYMEX fell 65¢ on Mar. 1 to settle at $60.99/bbl. The May contract dropped 67¢ to $60.80/bbl.

The NYMEX natural gas price for April gained 3¢ to a rounded $2.70/MMbtu. The Henry Hub cash gas price was unchanged at $2.61/MMbtu on Mar. 1.

Ultralow-sulfur diesel for April decreased by nearly 2¢ to a rounded $1.89/gal. The NYMEX reformulated gasoline blendstock for April fell nearly 3¢ to a rounded $1.90/gal.

Brent crude oil for May settled down 90¢ to $63.83/bbl on London’s International Commodity Exchange. The June contract was down 87¢ to $63.59/bbl. The gas oil contract for March was $561.75/tonne, down $15.25.

OPEC’s basket of crudes was $62.23/bbl on Mar. 1, down $1.74.

Contact Paula Dittrick at [email protected].