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Oil Extends Losses as US Crude Stockpiles Rise

March 28, 2018 at 16:44 by Andrew Moran

Oil futures are extending their losses midweek after the latest weekly US government report found an increase in domestic crude stockpiles. Oil prices have followed the overall trend in the equities market, falling nearly 3% over the last five trading sessions.

May West Texas Intermediate (WTI) crude futures tumbled $1.44, or 2.21%, to $63.81 per barrel at 16:24 GMT on Wednesday on the New York Mercantile Exchange. Despite advancing about 4% in March, US crude prices have slipped 2.5% this week.

Brent, the international benchmark for oil prices, is also slumping. May Brent crude futures plunged $1.23, or 1.75%, to $68.66 a barrel on London’s ICE Futures exchange. Brent crude prices have remained relatively flat over the last few trading sessions.

Oil prices have been settling at their best levels since the middle of February, but now they have retreated to one-week lows. Meanwhile, the leading indexes suffered a selloff, stemming from trade war angst and a major decline in technology shares.

According to the US Energy Information Administration (EIA), US crude stockpiles climbed 1.6 million barrels for the week ending March 23, which is now the fourth stock increase in the last five weeks. US output hit a fresh all-time high of 10.43 million barrels per day (bpd). Gasoline supplies dropped by 3.5 million barrels, while distillate stockpiles slid 2.1 million barrels.

The latest US Hughes Baker oil rig count stands at 804, up from 800 last week.

With oil touching large resistance levels, experts say that investors are cashing in on crude’s gains, particularly with the holiday-shortened week coming to an end.

The US dollar surged 0.53% on Wednesday, effectively paring its losses during the last couple of trading days.

In other energy markets, May natural gas futures were flat at $2.70 per million British thermal units. April gasoline futures shed $0.011, or 0.55%, to $2.002 per gallon. April heating oil futures dipped $0.0169, or 0.84%, to $2.0055 a gallon.

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