Business News

The largest refinery in the Midwest will have an unpalatable choice if President Donald Trump imposes tariffs on Canadian oil: Pay more for the crude that it transforms into gasoline and diesel, or slash production. Both options threaten to increase prices at the pump, albeit modestly if Trump sticks with the 10% rate he announced this month. It is not clear whether the tariff will take effect after Trump decided to hold it in abeyance until at least early March. Yet this refinery, built around 1889 on the south shore of Lake Michigan, near Chicago, is a reminder of just how difficult it can be to undo trade ties that go back decades. Trump, like many American leaders before him, appears to be yearning for a kind of energy independence that experts say is impractical and would not benefit individuals or the oil industry. "We don't need their oil and gas," Trump said last month, referring to Canada. "We have more than anybody." It boils down to this: No matter how much oil the United States pumps -- and it already is the top producer in the world by far -- its refineries were designed to run on a blend of different types of oil. Many can't function well without the darker, denser, cheaper crude that is hard to find domestically. Canada is flush with that oil, known as heavy crude. And facilities like this one, BP's refinery in Whiting, Indiana, were built around that supply. Companies have little reason to spend billions of dollars reconfiguring their systems for trade policy that may be fleeting. Not to mention there is uncertainty about the trajectory of global demand for gasoline and diesel, which some experts think could peak in the next decade as more people buy electric cars as well as trucks that run on natural gas and other fuels. "You can't turn the Titanic on a dime, and the industry is kind of the same way," said Rick Weyen, a retired refining executive who worked at the Whiting refinery for several years in the 1980s and '90s. Whiting, a facility of tanks, towers and more than 800 miles of pipelines, is among the most dependent in the country on Canadian oil. On any given day, between 65% and 75% of the crude flowing through it is of the dark, viscous variety found in the oil sands of Alberta. The rest is lighter, and much of it can come from Texas, New Mexico and other U.S. states. BP can tweak its recipe -- but only so much. Too little of the viscous stuff and the company would need to cut back its production of the fuels that power cars, trucks and airplanes. The refinery normally makes enough gasoline in a day to fuel more than 7 million cars, or about 3% of the gas-powered vehicles on American roads. The oil and gas industry, which was one of Trump's biggest supporters in last year's election, has urged him to exempt energy from the tariffs on Canada, saying the taxes could cause prices at the pump to rise. (During the campaign, Trump pledged to slash people's energy bills by more than half.) "It's not as simple as switching things out," said Chet Thompson, CEO of the American Fuel & Petrochemical Manufacturers, a trade association. In a sign that Trump heard the industry, which gave more than $75 million to his campaign, he lowered the planned tariff on Canadian energy imports to 10%, from 25%. At that level, some consumers may see gasoline prices rise a few cents, but analysts said much of the added cost would be absorbed by Canadian oil producers and U.S. refiners that are effectively locked into doing business with each other. The effects could be more severe if Canada were to retaliate against Trump's trade policies by making its oil more expensive, such as by imposing an export tax. A concurrent tariff on Mexican oil, even at 25%, is widely expected to be less disruptive on the U.S. side of the border because the United States imports less Mexican oil and the Gulf Coast refineries that use it have access to more alternatives than the refineries in the Midwest. Hours before the tariffs were set to take effect, Trump put them on hold for at least 30 days in exchange for stepped-up border security measures from Canada and Mexico. A White House spokesperson, Kush Desai, said in a statement that the deals demonstrated the president's "commitment to using every lever of executive power to put Americans and America First."Amid the uncertainty, Kelsi Thomas, 23, a special-education classroom assistant, was trying to figure out what a North American trade war might mean for her. Gas prices -- $3.10 a gallon last week at her local Love's outside Chicago -- were top of mind. "He was supposed to be bringing the prices down," she said of Trump.Refining companies, many of which reported year-end earnings in recent weeks, have sought to reassure investors that they are prepared come what may. "Studying tariffs has been at the top of the list of things that we've been doing," Maryann Mannen, CEO of fuel-making giant Marathon Petroleum, told Wall Street analysts last week. "It's likely," Mannen added, "that we would see cost increases. We believe that the majority of that will ultimately be borne by the producer and then, frankly, to a lesser extent, the consumer." The day after Trump said he was putting the levies on hold, Marathon Petroleum's stock price climbed nearly 7%. BP invited a reporter and a photographer to tour the Whiting refinery last week but canceled a planned interview with the refinery's top executive. In a statement, the executive, Chris DellaFranco, said, "We plan for every scenario."As with so much else these days, people's feelings about the prospect of tariffs often track how they see the president himself. Connie Salas, a Republican who owns a flower shop in Whiting, brushed off the risk that she may soon have to pay more for plants like azaleas and cyclamen, or to fill up her delivery truck. "The fact that the prices have been ranging around the $3 mark, if it goes up to $3.50, no big deal," Salas, 77, said of gasoline. "Whatever's got to be done to make the country better is fine with me." Humberto Martinez, a retired Whiting refinery worker, expressed more concern about Trump's trade policy. He voted for former Vice President Kamala Harris. "My pension from BP doesn't go up," Martinez, 75, said. "What I'm scared of is I'm not going to be able to afford the same lifestyle." (This article originally appeared in The New York Times)

A long bear candle was formed on the daily chart that has decisively broken the crucial support of 23,400 levels and closed lower. Technically this pattern indicates the prevalence of strong downside momentum in the market. The bullish chart pattern formed after the recent upside bounce has been negated and the sentiment has been changed to sharply negative. The larger degree bearish pattern like lower tops and bottoms is visible on the daily chart and the Nifty is now sliding down to form a new lower bottom below the swing low of January at 22,786 levels. However, any upside bounce from here could find strong resistance around 23,200 levels, said Nagaraj Shetti of HDFC Securities.In the open interest (OI) data, the highest OI on the call side was observed at 23,400 and 23,300 strike prices, while on the put side, the highest OI was at 22,700 strike price followed by 22,800.What should traders do? Here’s what analysts said:Satish Chandra Aluri, Lemonn Markets DeskBenchmark indices extended their losing streak on Tuesday with sharp losses on weak global cues and tariff fears after Trump announced reciprocal tariffs this week itself with India likely to get hit. India is at a high risk from potential U.S. reciprocal levies due to its pronounced tariff differentials. Technically, the Nifty 50 is once again back at the critical support levels around 23000 failing which it can retest the 22,800 level again while on the upside, the 23,200-23,300 zone acts as the next resistance.Rupak De, LKP SecuritiesThe index continues to decline as it remains below the critical 21 EMA moving average. The trend remains weak; however, after a meaningful correction, the proximity to the falling wedge support could provide a reason for recovery. On the lower end, the 22,900–22,940 zone may act as strong support, while on the higher end, resistance is placed at 23,300.Hardik Matalia, Choice BrokingOn the daily chart, the Nifty index has formed a strong bearish candle for the fifth consecutive session, indicating its struggle to sustain higher levels. This pattern suggests a cautious outlook, requiring confirmation for a sustainable upside move. The market remains highly volatile. On the downside, 23,000 serves as a key support level, and a break below this mark could trigger further selling toward 22,800. On the upside, immediate resistance is seen at 23,200, with a critical hurdle near 23,300. For a continued uptrend, the Nifty must sustain above the 23,500 mark.Hrishikesh Yedve, Asit C. Mehta Investment InterrmediatesTechnically, Nifty broke the 21-Days simple moving average (DSMA) support and formed a big red candle on the daily scale, indicating weakness, though it found support near the psychological level of 23,000. Sustaining below 23,000 could extend the decline to 22,800, while resistance is placed at 23,275 where the 21-DSMA is placed. Thus, a sell-on-rise strategy should be adopted for Nifty.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)