By Stephanie Yang and David Hodari
Oil prices declined on Wednesday as government data showed that crude stockpiles increased and U.S. production reached new heights last week.
Light, sweet crude for April delivery fell $1.45, or 2.3%, to $61.15 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, lost $1.45, or 2.2%, to $64.34 a barrel.
On Wednesday, the U.S. Energy Information Administration reported that the amount of crude in storage rose by 2.4 million barrels in the week ended March 2, compared with average analyst forecasts for a 2.3 million barrel build.
Weekly U.S. production climbed to a record high last week to 10.369 million barrels a day.
"The oil market is concerned that shale oil production overwhelms global supply," said Andy Lipow, president of Lipow Oil Associates.
Fears over a resurgence in shale growth have weighed on the market this year as forecasts point to increasing supply from U.S. producers.
The EIA raised its production estimate for 2018 again late Tuesday and now expects U.S. crude-oil production to climb by 1.4 million barrels a day. That came after the International Energy Agency lifted its forecasts for U.S. oil production Monday.
From a fundamental viewpoint, market participants remained torn between growing U.S. inventories and the continued efforts of the Organization of the Petroleum Exporting Countries and other major producers like Russia to cut output.
"It could end up being a situation where we add the barrels that OPEC has taken off the market," said Bob Yawger, director of the futures division at Mizuho Securities U.S.A.
The oil market has also been strongly influenced by other markets, such as stocks and currencies, in recent weeks. Analysts said a stronger U.S. dollar helped pull down oil prices on Wednesday, as the WSJ Dollar Index edged higher.
Additionally, the Dow Jones Industrial Average slid on investor concerns over the impact of steel and aluminum tariffs on the economy, particularly following White House economic adviser Gary Cohn's departure.
Gasoline futures fell 1.2% to $1.9103 a gallon and diesel futures fell 1.5% to $1.8746 a gallon.
Write to Stephanie Yang at [email protected] and David Hodari at [email protected]