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Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--Broader commodities had recovered ground lost Tuesday to a bruising read on U.S. consumer confidence, though markets remain on edge ahead of the implementation of North American tariffs.
Energy markets have been volatile for much of February, with West Texas Intermediate, the U.S. benchmark for the price of oil, down about 5% so far. The price was relatively unchanged from the prior day to trade near $69 per barrel on Wednesday.
Prices fell by 2.5% on Tuesday after a bruising report on U.S. consumer confidence. The U.S. Conference Board reported that its "expectations index"--a short-term outlook on incomes and market conditions--fell 9.3 points to 72.9, the worst reading since June.
A reading below 80 may be indicative of a looming recession, the Conference Board said.
Stephanie Guichard, a senior economist at The Conference Board, said this marks the third straight month for a decline in consumer confidence. Consumers felt that market conditions had declined, and they were less optimistic about future income.
"There was a sharp increase in the mentions of trade and tariffs, back to a level unseen since 2019," Guichard said. "Most notably, comments on the current administration and its policies dominated the responses."
Bolstered by the price of consumer staples such as eggs, The Conference Board said 12-month inflation expectations are at about 6%, compared to 3% over the 12-month period ending in January.
After a one-month pause while his North American trading partners mulled their response, U.S. President Donald Trump said Tuesday he would go ahead with tariffs on Canada and Mexico starting March 4.
Ostensibly to curb the cross-border flow of immigrants and illicit drugs, Trump proposed a 10% tariff on Canadian energy imports and a 25% tariff on all other goods imported from Mexico and Canada.
North American supply chains are highly integrated, and the tariffs are expected to be disruptive on both sides of the border. Many U.S. refineries, for example, are tailored to process the heavier type of oil found in Canada and Mexico, and not the light, sweet type found in U.S. shale basins.
Canada and Mexico are the top two crude oil exporters to the U.S. Canada delivers about 4 million barrels of oil per day (BBL/d) to U.S. refineries, representing about 60% of total U.S. imports.
Canadian Prime Minister Justin Trudeau has introduced a fentanyl czar in the hopes of appeasing the Trump administration, though the Canadian dispute over how to respond forced him to announce his resignation pending a replacement.
Provincial leaders in oil-rich Alberta, meanwhile, have lobbied for a working group to examine east-west trade arteries to break the trade dependence on the U.S. Much of the midstream infrastructure in Canada is land-locked to North America.
Ontario Premier Doug Ford, for his part, has been vocal about a tit-for-tat response to Trump's tariffs as Canadian's opinions about its southern neighbor sour considerably.
Speaking Tuesday, Ford said he wanted to avoid a trade war with the U.S., but he was ready for one if the Canadian economy were threatened.
"I'm in the ring and I'll do whatever it takes to make sure that we hit back, and they feel the pain like we feel the pain," he was quoted by The Canadian Press as saying.
Mexico's President Claudia Sheinbaum, meanwhile, said she was still anticipating that the U.S.-Mexico-Canada Agreement, a trade deal Trump helped broker during his first term, still would be honored.
"What we've established--I've said it from the beginning--is that the relationship and trade agreement with the United States has to be prioritized," she was quoted in the Mexico Daily News as saying.
The U.S. exports around 6 billion cubic feet of natural gas per day to Mexico.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).
Energy markets have been volatile for much of February, with West Texas Intermediate, the U.S. benchmark for the price of oil, down about 5% so far. The price was relatively unchanged from the prior day to trade near $69 per barrel on Wednesday.
Prices fell by 2.5% on Tuesday after a bruising report on U.S. consumer confidence. The U.S. Conference Board reported that its "expectations index"--a short-term outlook on incomes and market conditions--fell 9.3 points to 72.9, the worst reading since June.
A reading below 80 may be indicative of a looming recession, the Conference Board said.
Stephanie Guichard, a senior economist at The Conference Board, said this marks the third straight month for a decline in consumer confidence. Consumers felt that market conditions had declined, and they were less optimistic about future income.
"There was a sharp increase in the mentions of trade and tariffs, back to a level unseen since 2019," Guichard said. "Most notably, comments on the current administration and its policies dominated the responses."
Bolstered by the price of consumer staples such as eggs, The Conference Board said 12-month inflation expectations are at about 6%, compared to 3% over the 12-month period ending in January.
After a one-month pause while his North American trading partners mulled their response, U.S. President Donald Trump said Tuesday he would go ahead with tariffs on Canada and Mexico starting March 4.
Ostensibly to curb the cross-border flow of immigrants and illicit drugs, Trump proposed a 10% tariff on Canadian energy imports and a 25% tariff on all other goods imported from Mexico and Canada.
North American supply chains are highly integrated, and the tariffs are expected to be disruptive on both sides of the border. Many U.S. refineries, for example, are tailored to process the heavier type of oil found in Canada and Mexico, and not the light, sweet type found in U.S. shale basins.
Canada and Mexico are the top two crude oil exporters to the U.S. Canada delivers about 4 million barrels of oil per day (BBL/d) to U.S. refineries, representing about 60% of total U.S. imports.
Canadian Prime Minister Justin Trudeau has introduced a fentanyl czar in the hopes of appeasing the Trump administration, though the Canadian dispute over how to respond forced him to announce his resignation pending a replacement.
Provincial leaders in oil-rich Alberta, meanwhile, have lobbied for a working group to examine east-west trade arteries to break the trade dependence on the U.S. Much of the midstream infrastructure in Canada is land-locked to North America.
Ontario Premier Doug Ford, for his part, has been vocal about a tit-for-tat response to Trump's tariffs as Canadian's opinions about its southern neighbor sour considerably.
Speaking Tuesday, Ford said he wanted to avoid a trade war with the U.S., but he was ready for one if the Canadian economy were threatened.
"I'm in the ring and I'll do whatever it takes to make sure that we hit back, and they feel the pain like we feel the pain," he was quoted by The Canadian Press as saying.
Mexico's President Claudia Sheinbaum, meanwhile, said she was still anticipating that the U.S.-Mexico-Canada Agreement, a trade deal Trump helped broker during his first term, still would be honored.
"What we've established--I've said it from the beginning--is that the relationship and trade agreement with the United States has to be prioritized," she was quoted in the Mexico Daily News as saying.
The U.S. exports around 6 billion cubic feet of natural gas per day to Mexico.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).
