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OIL: Crude Extends Decline on OPEC Supply and Concern for Tariff Impact

OIL
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Crude markets extend the decline following a sharp fall on Monday after reports that OPEC will go ahead with its output normalisation from April counter to market expectation. The impact of US tariffs and retaliatory measures on global demand is also weighing on prices.

  • An additional 10% US tariff was imposed on China today with retaliatory measures against US agriculture. The 25% tariff will go on imports from Mexico and Canada today. The US will impose 10% on Canadian energy imports, including oil.
  • Canada has responded with 25% tariffs on around C$30bn of US goods initially followed by C$125bn in three weeks. Ontario is threatening to stop energy and critical mineral shipments to the US.
  • OPEC signalled it will proceed with its planned output hike of 138k b/d in April amid healthy market fundamentals and positive market outlook. The gradual increase may be paused or reversed subject to market conditions, OPEC added.
  • Any progress towards peace in the Russia-Ukraine conflict could lead to sanctions relief for Russia. President Donald Trump paused all U.S. military aid to Ukraine following the clash with President Zelenskiy last week.
  • Goldman Sachs see downside risks to oil price forecasts from higher than expected OPEC+ supply and softer demand while Citi see Brent falling to $60 - 65/bbl over 6-12 months.
    • Brent MAY 25 down 1% at 70.9$/bbl
    • WTI APR 25 down 0.8% at 67.83$/bbl
    • Brent MAY 25-JUN 25 down 0.03$/bbl at 0.43$/bbl
    • Brent JUN 25-DEC 25 down 0.25$/bbl at 1.89$/bbl
    • US gasoline crack up 0$/bbl at 23.98$/bbl
    • US ULSD crack up 0.3$/bbl at 27.56$/bbl
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Crude markets extend the decline following a sharp fall on Monday after reports that OPEC will go ahead with its output normalisation from April counter to market expectation. The impact of US tariffs and retaliatory measures on global demand is also weighing on prices.

  • An additional 10% US tariff was imposed on China today with retaliatory measures against US agriculture. The 25% tariff will go on imports from Mexico and Canada today. The US will impose 10% on Canadian energy imports, including oil.
  • Canada has responded with 25% tariffs on around C$30bn of US goods initially followed by C$125bn in three weeks. Ontario is threatening to stop energy and critical mineral shipments to the US.
  • OPEC signalled it will proceed with its planned output hike of 138k b/d in April amid healthy market fundamentals and positive market outlook. The gradual increase may be paused or reversed subject to market conditions, OPEC added.
  • Any progress towards peace in the Russia-Ukraine conflict could lead to sanctions relief for Russia. President Donald Trump paused all U.S. military aid to Ukraine following the clash with President Zelenskiy last week.
  • Goldman Sachs see downside risks to oil price forecasts from higher than expected OPEC+ supply and softer demand while Citi see Brent falling to $60 - 65/bbl over 6-12 months.
    • Brent MAY 25 down 1% at 70.9$/bbl
    • WTI APR 25 down 0.8% at 67.83$/bbl
    • Brent MAY 25-JUN 25 down 0.03$/bbl at 0.43$/bbl
    • Brent JUN 25-DEC 25 down 0.25$/bbl at 1.89$/bbl
    • US gasoline crack up 0$/bbl at 23.98$/bbl
    • US ULSD crack up 0.3$/bbl at 27.56$/bbl