Oil prices fall as Trump adviser’s exit stokes concerns; US crude inventories rise

Oil prices fell on Wednesday, pulled down by weaker stock markets after Gary Cohn, a key advocate for free trade in the US government, resigned. Cohn’s resignation stoked concerns that Washington will go ahead with import tariffs and risk a trade war.

Soaring US crude oil production and rising inventories also dragged on crude prices, traders said.

Crude oil was affected by the news, with Brent futures down 51 cents, or 0.8 percent, from their previous close at $65.28 per barrel as of press time.

US West Texas Intermediate crude futures were at $62.19 a barrel, down 40 cents, or 0.65 percent.

“The overhang from the Cohn resignation... could see oil prices move lower during Wednesday’s session,” said Stephen Innes, head of trading for Asia-Pacific at futures brokerage OANDA in Singapore.

Cohn’s move to resign came after he lost a fight over plans for hefty steel and aluminum import tariffs.

Major powers, including the EU, have warned that such tariffs could lead to retaliatory action and trigger a global trade war, which could grind to a halt economic growth and, by extension, oil consumption.

Traders said oil prices were also weighed down by a reported rise in US crude oil inventories.

The Energy Information Administration (EIA) on Tuesday made its latest in a series of upward revisions for US crude oil production, which it now expects to rise by more than 120,000 barrels per day (bpd) to 11.17 million bpd by the fourth quarter of 2018.

That would take the US past Russia to become the world’s biggest oil producer. The US already passed top exporter Saudi Arabia late in 2017.