By Alison Sider and Sarah McFarlane
Oil prices resumed their slide on Thursday, under pressure from rising U.S. production, a rise in the U.S. dollar, and falling gasoline prices.
U.S. crude futures fell $1.03, or 1.68%, to $60.12 barrel on the New York Mercantile Exchange. Brent, the global benchmark, fell 73 cents, or 1.13%, to $63.61 a barrel on ICE Futures Europe. Both benchmarks settled at their lowest level since Feb. 13.
Thursday's move extended a sharp selloff that began Wednesday after the U.S. Energy Information Administration data showed crude inventory rose 2.4 million barrels and production hit a new record high in the week ended Friday, 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 gasoline prices tumbled Thursday, weighing on the oil market. Colonial Pipeline said it would restart one of its fuel pipelines by the end of the day Thursday after discovering a spill Wednesday -- earlier than some expected. Reports that Motiva has restarted a unit at its massive Gulf Coast refinery added to the pressure.
Gasoline futures tumbled 2.23% to $1.8677 a gallon. Diesel futures fell 0.83% to $1.8591 a gallon.
"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."
At the same time, the rising dollar also weighed on oil prices, analysts said. The U.S. dollar got a boost Thursday as the euro fell. Oil prices often fall when the dollar rises, as a stronger dollar makes oil more expensive for buyers using foreign currencies. The Wall Street Journal Dollar Index, which measures the U.S. currency against a basket of 16 others, was recently up 0.49%.
And technical factors added to the momentum as selling gained steam, 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, concerned the move could trigger a trade war. Already several countries have suggested tariff actions in response.
"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]