Oil prices fall on trade war fears, inventory gains

March 7 (UPI) — U.S. crude oil and stock index figures shifted lower Wednesday amid global market fears on a trade war, the resignation of President Donald Trump’s chief economic adviser and rising inventories.

Brent oil futures opened at 65.56 and were trading down 23 cents at 9 a.m. EST.

The April crude oil futures started the session at 62.30, and was down 22 cents.

One day after Gary Cohn said he would resign his position in the White House, European markets were falling Wednesday. Cohn, a free trade advocate and former president at Goldman Sachs, had opposed Trump’s plans for the proposed tariffs on aluminum and steel. Cohn’s resignation announcement came after the U.S. markets closed on Tuesday.

“It strengthens the case for a potential trade war,” George Wilkes, an analyst at Sucden in London, told S&P Global Platts. “We are not going there yet… but the market is slightly spooked.”

Around 8:25 a.m. EST on Wednesday, Dow futures slumped 210 points. The market then dropped 232.12 points lower at the open, but rebounded up 9.36 to 24884.12. On Tuesday, the Dow closed up 9.36.

The Nasdaq and S&P 500 futures also declined sharply.

The U.S. Energy Informational Administration released its short-term forecast Tuesday, forecasting Brent spot prices will average about $62 barrel in 2018 and 2019 compared with an average of $54 per barrel in 2017. And EIA expects West Texas Intermediate crude oil prices to average $4 a barrel lower than Brent prices in 2018 and 2019.

EIA estimated that U.S. crude oil production averaged 10.3 million barrels per day in February, which is an increase of 230,000 barrels per day from the January level, when there were some well freeze-offs in the Permian and Bakken fields.

Inventories of global petroleum and other liquid fuels declined by 0.6 million barrels per day per day in 2017, the agency also reported.

And weekly figures from the American Petroleum Institute released Tuesday showed U.S. crude inventories rose by 5.66 million barrels for the week ending Friday, the second consecutive week-over-week increase.

Several reports are to be issued today, including the U.S. Energy Information Administration weekly report on oil inventories, the Federal Reserve’s latest Beige Book and the consumer credit report.