AMERICAS OIL: WTI Down 3% on the Week

January 31 - Americas End-of-Day Oil Summary: WTI Down 3% on the Week Amid Intraday Confusion Over Implementation of Tariffs  

• WTI ended lower after reversing earlier gains as the White House press secretary refuted a previous Reuters article which suggested tariffs on Mexico and Canada could be postponed until March. Caroline Leavitt said the 25% tariffs on Mexico and Canada would take effect Saturday as planned.
• Earlier confusion stemmed from a Reuters story that suggested the two countries might get a one-month cooling off period with the possibility that oil could be exempted. Canadian crude pared gains on the tariff news; WCS for Mar delivery traded $13.85 below WTI.
• Baker Hughes reported its weekly rig count was up 6 at 582, the first gain in 8 weeks. Oil rigs were up 7 at 479, which was down 20 rigs or 4.0% on the year. Gas rigs were down 1 at 98, which was down 23 rigs or 19.0% on the year.
• The NOAA 6–14-day outlook is predominantly bearish for heating demand, with above-normal temperatures expected from the Southeast to the Southwest while the Upper Northwest and northern New England are below normal. Thus, only parts of PADDs 1 and 5 are likely to see elevated heating demand.
• Gasoline cracks were down slightly but were on track for gains of around 8.6% on the week. US gasoline stocks rose to the highest since Feb 2024 amid higher imports and lower exports, but gasoline demand was 1.8% above the 4-week average. The ULSD crack was only slightly weaker with the weather forecast mostly bearish but with distillate demand 4.5% above the 4-week average.
  • WTI Mar futures were down 0.3% at $72.53
  • WTI Apr futures were down 0.3% at $71.94
  • RBOB Feb futures were down 0.0% at $2.04
  • ULSD Feb futures were up 0.4% at $2.48
  • US gasoline crack down 0.3$/bbl at 13.90$/bbl
• US ULSD crack down 0.1$/bbl at 28.14$/bbl
• LyondellBasell shut a crude and coker unit at its 290kb/d Houston refinery as the scheduled 1Q shutdown continues. They see 1Q utilization at 35% due to the unit’s shutdown.
• Chevron is seeking to protect a special US license allowing it to operate in Venezuela, arguing China and Russia would gain influence there if they are forced out by the Trump administration.
• The Houston Ship Channel reopened for traffic as fog cleared according to Moran shipping.