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US Crude Plunges 3% as Domestic Output Jumps, Market Mourns Cohn Departure

March 7, 2018 at 17:44 by Andrew Moran

Oil futures plummeted more than 3% midweek amid a new US government report that showed a bump in domestic stockpiles and an increase in crude output. Oil prices have been negative territory throughout the trading session, stemming from the resignation of White House chief economic adviser Gary Cohn and overall weakness in the equity mark.

April West Texas Intermediate (WTI) crude futures tumbled $2.02, or 3.23%, to $60.58 per barrel at 16:27 GMT on Wednesday on the New York Mercantile Exchange. US crude prices have been trading higher over the last several sessions, but they have remained relatively flat year-to-date.

Brent, the international benchmark for oil prices, is also slipping in the middle of the trading week. May Brent crude futures slid $1.72, or 2.61%, to $64.07 a barrel on London’s ICE Futures exchange. Year-to-date, Brent prices have fallen 3%.

According to the US Energy Information Administration (EIA), domestic crude supplies climbed by 2.4 million barrels for the week ending March 2, while US production surged 86,000 barrels to 10.369 million barrels per day (bpd). Gasoline stockpiles fell 800,000 barrels, while distillate inventories plunged 600,000 barrels.

Oil prices have been weak throughout the Wednesday trading session. The markets are reacting to Cohn, who is considered friendly to Wall Street, quitting the administration. The resignation occurred on the heels of President Donald Trump announcing new tariffs on steel and aluminum, which Cohn disapproved of and often clashed with protectionist trade advisers in the White House. The Dow Jones is posting triple-digit losses, while the rest of the market is seeing red.

The latest Baker Hughes oil rig count stands at 800, up from 799 last week.

In other energy markets, April natural gas futures rose $0.029, or 1.05%, to $2.78 per million British thermal units (btu). April gasoline futures dropped $0.03, or 1.55%, to $1.903 per gallon, while April heating oil futures decreased $0.0359, or 1.89%, to $1.8674 a gallon.

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