Oil Prices Extend Losses on Swelling U.S. Stocks
By Stephanie Yang and Sarah McFarlane
Oil prices fell to a two-week low Thursday, weighed down by diminished risk appetite among investors and a larger-than-expected increase in crude stockpiles.
Light, sweet crude for April delivery lost 65, or 1.1%, to $60.99 a barrel on the New York Mercantile Exchange, its third consecutive session of losses. Brent, the global benchmark, lost 90 cents, or 1.4%, to $63.83 a barrel.
On Wednesday, the U.S. Energy Information Administration reported that crude oil stockpiles rose by 3 million barrels in the week ended Feb. 23, a greater increase than anticipated by most analysts.
"I think the market's still reacting to yesterday's inventory report," said Gene McGillian, research manager at Tradition Energy. "The restart of our rally seems to be fizzling out."
In recent weeks, crude prices have taken cues from other markets such as stocks and the U.S. dollar. On Thursday, U.S. stocks slid on concerns over the prospect of steel and aluminum tariffs, and the effect on trade.
"There's obviously a move away from risk assets, crude oil being one of those," said Bob Yawger, director of the futures division at Mizuho Securities U.S.A.
Data from the EIA also showed that weekly U.S. production hit a fresh high of 10.283 million barrels a day.
"The domestic production number is just ripping," Mr. Yawger said. "In this environment, this situation in the shale space has really become to focus of the market at the expense of the OPEC production cuts."
The International Energy Agency expects the U.S. to eclipse Russia by 2019 as the world's biggest crude producer with the shale oil boom continuing to boost output.
Coordinated efforts by the Organization of the Petroleum Exporting Countries and other major producers including Russia to cut production and counter the rise in output from countries including the U.S. helped underpin prices.
"The tug of war between OPEC and its peers and U.S. shale producers continues," said Tamas Varga, analyst at brokerage PVM.
Gasoline futures fell 1.5% to $1.8964 a gallon, and diesel futures lost 0.9% to $1.8855 a gallon.
Write to Stephanie Yang at email@example.com and Sarah McFarlane at firstname.lastname@example.org
(END) Dow Jones Newswires
March 01, 2018 16:57 ET (21:57 GMT)Copyright (c) 2018 Dow Jones & Company, Inc.