
Apr 16
/
Timothy Vince
Market Update – Post Tariff Impacts
"Trump's tariffs raise concerns about U.S. economic growth and trade flow, which should affect the energy market."
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Flat Price Impact
- Crude and refined products both fell on “Liberation Day” April 2nd on demand destruction fears from tariffs. Higher prices for imported goods can hurt industrial output, global trade volumes and slow freight and logistics activity. The market now expects lower demand for energy.
- There is now a concern for global growth leading to a risk-off approach in the market. Countries like China are one of the largest sources of oil demand and they are the ones being targeted most heavily by tariffs.
Flat Price Impact
- Crude and HO remain backwardated but the curves are both flattening out.
- The slope of the WTI curve is dropping, reflecting less prompt month demand.
Figure 1: WTI Forward Curve

Source: Refinitiv, Hedgepoint
Figure 2: HO Forward Curve

Source: Refinitiv, Hedgepoint
Dollar Impact
The market sees tariffs as inflationary. There are also concerns about economic growth now. The Fed may be forced to cut rates soon if growth concerns continue, but the Fed still hasn’t reached its goal of 2% inflation, making the situation a hard one. In summary the market sees the Fed easing, inflation risk and also U.S. economic vulnerability.
Looking Forward
The Trump administration is in the middle of a 90 day pause and has carved out tariff exemptions on some consumer products. Many countries are proposing to levy tariffs on the US in response. Some countries are negotiating deals with the US to avoid tariffs. These negotiations are not open to the public, making it hard to grasp their possible outcome, highlighting the importance of keeping updated. The EU expects US tariffs to remain as their talks with the Trump administration has made little progress thus far. Meanwhile, market believes that China is preparing for a longer trade war with the US.
Weekly Report — Energy
Written by Timothy Vince
timothy.vince@hedgepointglobal.com
timothy.vince@hedgepointglobal.com
Reviewed by Livea Coda
livea.coda@hedgepointglobal.com
livea.coda@hedgepointglobal.com
www.hedgepointglobal.com
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