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Crude Oil Prices Move Lower on Supply Data, U.S. Policy Worries

Published 07/03/2018, 08:33
Updated 07/03/2018, 08:36
© Reuters.  Crude oil loses ground in risk-off trade, U.S. supply data weighs
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Investing.com - Crude oil prices moved lower on Wednesday, weighed by the release of downbeat U.S. supply data and by the threat of potential trade wars.

The U.S. West Texas Intermediate crude April contract was down 65 cents or about 0.94% at $62.01 a barrel by 03:30 a.m. ET (07:30 GMT), off the previous session's one-week high of $63.27.

Elsewhere, Brent oil for May delivery on the ICE Futures Exchange in London declined 63 cents or about 0.96% to $65.15 a barrel.

The American Petroleum Institute reported late Tuesday that crude oil inventories rose by 5.66 million barrels in the week ended March 2, compared to expectations for an increase of 2.70 million barrels.

Market participants were looking ahead to official data by the U.S. Energy Information Administration, due later Wednesday.

Oil prices had strengthened after the International Energy Agency said on Monday that global oil demand was expected to grow in the next five years, while output from producers in the Organization of the Petroleum Exporting Countries (OPEC) would rise at a much slower pace.

OPEC, along with some non-OPEC members led by Russia, agreed in December to extend oil output cuts until the end of 2018.

The deal to cut oil output by 1.8 million barrels a day (bpd) was adopted last winter by OPEC, Russia and nine other global producers. The agreement was due to end in March 2018, having already been extended once.

However, the IEA also upwardly revised U.S. oil output growth, saying the country would be producing a total of nearly 17 million barrels per day (bpd) in 2023.

U.S. crude oil production has already surpassed that of top exporter Saudi Arabia to 10.28 million bpd.

Rising U.S. output has weighed on oil prices in recent months amid fears it could dampen global efforts to rid the market of excess supplies.

Meanwhile, sentiment waned after U.S. President Donald Trump said on Tuesday that he would push ahead with his tariffs on steel and aluminum imports despite growing pressure from political allies to back down from the measures.

The tariffs, announced last week, have sparked concerns over a potential trade war.

Markets were also jittery after Trump's economic adviser Gary Cohn announced his resignation on Tuesday. The decision was said to have been made following a disgreement between Cohn and the U.S. President over the import tariffs.

Elsewhere, gasoline futures slid 0.67% to $1.928 a gallon, while natural gas futures rose 0.25% to $2.756 per million British thermal units.

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