May 31 (UPI) -- Benchmark indices for oil were in a wide spread Thursday as U.S. oil inventories swell and global economic pressures intensify on the back of tariff concerns.
U.S. President Donald Trump is widely expected to follow through with a decision to impose tariffs on steel and aluminum imports from Canada, Mexico and the European Union, among Washington's strongest allies. The president in April signed off on a 25 percent tariff on steel imports and a 10 percent tariff for aluminum, rattling the nerves of those in the domestic energy sector. Offered exemptions would expire on Friday.
Trump's decision would run counter to pleas from the U.S. energy sector, which relies on foreign niche suppliers for infrastructure like oil and gas pipelines. Broader trade fears, including tariff action on China, could lead to global economic problems.
The price for Brent crude oil was up 0.44 percent as of 9:16 a.m. EDT to $78.06 per barrel. West Texas Intermediate, the U.S. benchmark for the price of oil, was down 1.7 percent to $67.00 per barrel.
WTI is trading at a steep discount to Brent because, while the United States continues to accelerate as a producer, much of the oil remains landlocked because of a lack of pipeline capacity.
Late Tuesday, the American Petroleum Institute reported U.S. crude oil inventories increased by 1 million barrels last week. Markets will be influenced later in the day when the U.S. Energy Information Administration releases federal data, delayed one day by the U.S. holiday. Discrepancies between EIA and API will push the price of oil in either direction.
Markets, meanwhile, could face further pressure from signs of more U.S. oil. An offshore subsidiary of Royal Dutch Shell said Thursday it started production early at its Kaikias field in the U.S. waters of the Gulf of Mexico.
Online a year ahead of schedule, the project has a peak production capacity of 40,000 barrels of oil equivalent per day.
Elsewhere, the U.S. Commerce Department reports that personal incomes increased by 0.3 percent in April, besting the 0.2 percent increase in the previous month. Spending, meanwhile, increased 0.6 percent, driven in large part by consumer fuels.
The U.S. Commerce Department also reported Wednesday its estimate for annual growth in gross domestic product in the first quarter was 2.2 percent, 0.1 percent lower than its previous estimate. Fourth quarter GDP increased 2.9 percent.