By Alison Sider and Sarah McFarlane
Oil prices resumed their slide on Thursday, under pressure from rising U.S. crude inventories and record domestic output and pulled lower by falling gasoline prices.
U.S. crude futures recently fell 80 cents, or 1.31%, to $60.35 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, fell 64 cents, or 1.01%, to $63.69 a barrel on ICE Futures Europe.
Prices dipped on Wednesday immediately after the U.S. Energy Information Administration data showed crude inventory rose 2.4 million barrels and production hit a record high in the week ended March 2.
"The high production level leaves no room to doubt the robustness of U.S. oil production, so the market response is understandable," said Carsten Fritsch, analyst at Commerzbank.
The EIA expects U.S. crude production to average a record 10.7 million barrels a day this year, rising to 11.3 million barrels in 2019.
And while gasoline inventories edged lower last week, according to the EIA figures, the amount of gasoline in storage is still high for this time of year after several weeks of building stockpiles. Reports that Motiva has restarted a unit at its massive Gulf Coast refinery put more pressure on fuel prices Thursday. Gasoline futures fell 1.64% to $1.8789 a gallon and diesel futures fell 0.78% to $1.86 a gallon Thursday.
"There's a lot of pressure on the front end of gasoline," said Donald Morton, who oversees an energy trading desk at Herbert J. Sims & Co. "Crude oil is just following it down."
Technical factors added to the momentum as selling accelerated, analysts and brokers said.
"We're vulnerable. There's more room to the downside," said Ric Navy, senior vice president for energy futures at R.J. O'Brien & Associates.
Investors awaited clarity over U.S. President Donald Trump's plans to impose tariffs on steel and aluminum, which are expected to be signed this week. Already, several countries have suggested tariff actions in response. Oil prices have closely tracked movements in equity and currency markets lately, and stock indexes pared gains throughout the morning.
"Fears of a global trade war continue to loom and affect the financial markets, spilling over to the oil market; weighing on prices," said consultancy Global Risk Management in a note.
Write to Alison Sider at [email protected] and Sarah McFarlane at [email protected]