Crude Oil Prices Fall as Dollar Strengthens

Crude oil prices dropped to their lowest level in over a week on Thursday, weighed down by a stronger U.S. dollar and concerns over possible new tariffs. President Donald Trump threatened to impose a 10% tariff on Chinese goods, raising fears of a trade war that could slow global economic growth and reduce energy demand.

March WTI crude oil fell by 0.48%, while March RBOB gasoline rose slightly by 0.26%. Despite the pressure, crude prices found some support due to U.S. sanctions on Russian oil, which have tightened global markets.

Key Factors Driving Oil Prices

1. Tariff Threats
   Trump’s comments about a potential tariff on Chinese goods in response to fentanyl shipments from China have created uncertainty in the market. A trade war could weaken economic activity, lowering demand for oil.
2. Increase in Stored Crude Oil
   Crude oil stored on stationary tankers worldwide increased by 2.5% last week, reaching over 54 million barrels, according to Vortexa. This rise in inventories further pressured prices.
3. Russian Oil Sanctions
   The U.S. recently imposed sanctions on Russia’s oil industry, targeting companies like Gazprom Neft and Surgutneftgas. These measures have disrupted Russian crude exports, which dropped by 260,000 barrels per day last week.
4. OPEC+ Adjustments
   OPEC+ has delayed planned production increases, with output hikes now pushed to 2026. This move supports crude prices by keeping supply tight.
5. Weaker Chinese Demand
   China, the world’s largest crude importer, saw a 1.9% drop in oil imports last year, further dampening demand.

Inventory and Production Updates

• U.S. crude oil inventories are 6.3% below their five-year seasonal average, while gasoline and distillate stocks are also below average.
• U.S. crude production fell slightly to 13.481 million barrels per day, down from a record high in December.

Market Outlook

Analysts expect U.S. crude inventories to decline by 400,000 barrels this week, while gasoline stocks are forecasted to rise by over 2 million barrels.

While short-term factors like a stronger dollar and trade uncertainty weigh on prices, long-term supply concerns due to sanctions and production delays may provide support.

This market volatility highlights the delicate balance between supply, demand, and geopolitical tensions shaping global oil prices.