Crude oil prices plunged over 5% this morning after the US DoE reported that its commercial inventory increased by 8.2 million barrels over the last week, far exceeding the consensus of 2.5 million.

The data catalysed a new wave of glut concerns as the higher oil price might spur North American’s production, especially of shale oil, which may ultimately counterbalance OPEC’s effort to support oil prices.

TWI oil fell by as much as 5.8% to the US$ 50.05 area, while Brent plunged 4.9% to US$ 53.10, both hitting three-month lows. Technically, WTI oil has broken down the key support level of US$51.72 and its next support level could be found at around the USS$ 48.70 area. SuperTrend has flipped into a downward trend following the significant drop in price last night, suggesting that near-term momentum might turn bearish.

The US equity market slid 0.25% last night, mainly dragged down by the energy (-2.5%) and utility (-1.5%) sectors as the oil price slumped. A similar pattern may be observed in the Singapore market today, where oil and gas stocks might be under pressure.

Last night, the US ADP National Employment Report showed that the US private sector added 298k jobs in February, higher than the 190k estimate. The robust number also solidified market expectations for this Friday’s non-farm payroll, as well as March’s rate hike. The probability of a March rise has now hit 100%, according to Bloomberg’s interest rate forecast.

As a result, the Dollar Index climbed for a third day to the 102.1 area this morning. A stronger dollar and optimistic US data sent precious metal prices to their lowest levels in over a month. Gold is now trading at US$1,208, with the immediate support level in the US$1,193 area.

Crude Oil West Texas - Cash

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