Oil Futures Steady as Trump Defies Ruling on U.S. Tariffs


   
Barani Krishnan
DTN Refined Fuels Market Reporter

   SECAUCUS, NJ (DTN) -- Oil futures settled little changed on Friday (2/20) 
after U.S. President Donald Trump said he will use alternatives to keep in 
place import tariffs outlawed by the Supreme Court. The pledge was a sign to 
markets, including energy, that the government's finances will be intact and 
not materially affect its handling of the economy.

   "Other alternatives will be used on tariffs; we could take in more money," 
Trump told a news conference at the White House where he announced a new 
uniformed 10% tariff on all countries as his administration tries to find 
workarounds to its use of the International Emergency Economic Powers Act 
(IEEPA) outlawed by the Supreme Court on Friday.

   Trump was the first U.S. president to use the IEEPA for import taxes in the 
near 50-year history of the law. Under that legislation, his administration 
imposed a universal 10% to 20% tariff on all imported goods while targeting 
certain countries with more duties, particularly China which has had to pay 
60%. Supreme Court Chief Justice John Roberts, however, found the use of the 
IEEPA for tariffs illegal.

   The oil market, which had rallied extensively in two prior days of trading 
on supply risks associated with Iran, fell in Friday's morning session before 
steadying on Trump's response to the court ruling. The administration has 
collected billions of tariff dollars from importers and might have to refund 
those monies, impacting its finance, if it honors the ruling.

   The downside to crude prices was also capped by tensions over Iran. Trump 
confirmed media speculation on Friday that the U.S. was mulling a low-scale 
military strike on the fourth largest OPEC exporter if it did not immediately 
dismantle its nuclear program.

   NYMEX WTI crude futures for March delivery settled down $0.04 at $66.39 bbl. 
ICE Brent crude for April delivery, meanwhile, rose $0.14 to close at $71.76 
bbl.

   Downstream, RBOB futures for March were down $0.0080 to $1.9986 while 
front-month ULSD futures slid $0.0337 to $2.5810 gallon.

   The U.S. dollar index fell too, easing 0.120 points to 97.735 against a 
basket of foreign currencies, limiting the drop in dollar-denominated energy 
prices.




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