NEW YORK -- Crude prices plunged Tuesday after U.S. dollar appreciated against other currencies as a stronger greenback made the dollar-denominated crude more expensive and less attractive for buyers.
The upbeat nonfarm payrolls for February raised market expectation that the Federal Reserve may raise interest rates in mid-year, which gave a boost to the U.S. dollar. The U.S. central bank has kept rates near zero for nearly seven years to lift the waning economy.
While the global supply glut continued to weigh on the market. Total U.S. crude oil production was estimated to average 9.4 million barrels per day (bbl/d) in February, according to the Energy Information Administration (EIA)'s energy outlook released Tuesday.
EIA projected total U.S. crude oil production averages 9.3 million bbl/d in 2015 and 9.5 million bbl/d in 2016, close to the 9.6 million bbl/d highest annual average level of U.S. production in 1970.
Meanwhile, there is little sign for Organization of Petroleum Exporting Countries (OPEC), which pumps a third of world oil, to cut its collective output quota of 30 million barrels a day, in response to the oil slump.
Light, sweet crude for April delivery lost 1.71 U.S. dollars to settle at 48.29 dollars a barrel on the New York Mercantile Exchange while Brent crude for April delivery moved down 2.14 dollars to close at 56.39 dollars a barrel.
