OIL PRICE: ABOVE $68 AGAIN
Brent crude futures LCOc1 for March delivery settled down 44 cents, or 0.6 percent, at $69.02 a barrel after touching a session low of $68.40.
U.S. West Texas Intermediate futures CLc1 fell $1.06, or 1.6 percent, to close at $64.50 a barrel.
Futures traded weaker in post-settlement trading after weekly inventory figures from industry group the American Petroleum Institute showed a 3.2 million-barrel increase in crude oil stocks for last week.
If the U.S. Energy Department data on Wednesday also shows an increase in inventories, it would break an 11-week streak of drawdowns. Analysts polled by Reuters forecast an average 100,000-barrel build in crude stocks.
"We certainly will get some post-settlement weakness carrying into tomorrow's EIA data," said Mike Sabo, senior market strategist at RJO Futures in Chicago.
"We've seen a substantial rise of $10 for WTI move in the last 60 days. This could be the beginning of a possible correction," he added.
U.S. blue-chip stocks opened under pressure, weighed down by a jump in government bond yields and an earlier rise in the dollar .
U.S. stocks fell for a second straight day, with the Dow Jones Industrial Average [.DJI] down 362.59 points, or 1.37 percent. It was the biggest daily percentage decline since May 2017 and the second-biggest single-day drop since the election of Donald Trump, ahead of his first State of the Union speech on Tuesday.
"There are some concerns that when you get a pull-back in the stock market it may be killing the bullish argument that the economy is strong," said Phil Flynn, analyst at Price Futures Group in Chicago.
With oil's negative correlation to the dollar reaching its strongest in a month, even continued signs of robust demand for crude were not enough to ward off profit taking following last week's rise to three-year highs.
Oil's inverse relationship to the dollar, whereby a stronger currency makes it more expensive for non-U.S. investors to buy dollar-denominated assets, has reasserted itself this week.
U.S. production is already on par with that of Saudi Arabia, the biggest producer in the Organization of the Petroleum Exporting Countries (OPEC). Only Russia produces more, averaging 10.98 million barrels per day (bpd) in 2017.
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REUTERS - A consortium of western companies and Russia’s Gazprom that is due to build the controversial subsea Nord Stream 2 gas pipeline to Germany said on Tuesday it was starting preparatory work in the Greifswald bay off Germany’s Baltic coast.
GAZPROM - The parties reviewed the issues of cooperation in the energy industry, focusing on, inter alia, substantial growth in Russian gas exports to Austria. According to preliminary data, from January 1 through May 14, 2018, Gazprom delivered to Austria 4.7 billion cubic meters of gas, an increase of 70.4 per cent from the same period of last year.
FRB - Industrial production rose 0.7 percent in April for its third consecutive monthly increase. The rates of change for industrial production for previous months were revised downward, on net; for the first quarter, output is now reported to have advanced 2.3 percent at an annual rate.
WNN - Rosatom, the Russian state nuclear corporation, signed a series of agreements with overseas companies during the Atomexpo conference and exhibition being held this week in Sochi, Russia. The agreements, with Chile, China, Cuba, Finland, Hungary, Iran, Italy, Kazakhstan, Saudi Arabia, Serbia, Spain and Zambia, include the engineering and medical sectors, among others.