Oil mixed on equities rout

Crude oil prices were mixed on Tuesday, as markets were still recovering from a major rout in global equities, while concerns over high U.S. crude production levels persisted.

The U.S. West Texas Intermediate crude March contract was little changed at $64.14 a barrel by 04:00 a.m. ET (08:00 GMT), after earlier falling to a two-and-a-half week trough of $63.12.

Elsewhere, Brent oil for April delivery on the ICE Futures Exchange in London declined 26 cents or about 0.41% to $67.33 a barrel, just off a one-month low of $66.53 hit earlier in the day.

Investors grew more cautious after global equity markets began to plunge on Friday following the release of strong U.S. employment data, which sparked concerns over rising inflation, sending bond yields sharply higher.

The Dow Jones Industrials index was particularly hit on Monday, when it recorded its worst daily point drop in history.

Oil prices were already under pressure after General Electric (NYSE:GE)’s Baker Hughes energy services firm reported on Friday that the number of oil drilling rigs climbed for a second week in a row. It rose by six to 765 last week, implying that further gains in domestic production are ahead.

Domestic U.S. output has increased by almost 20% from the most recent low in mid-2016 and increasing drilling activity for new production means output is expected to grow further, as producers are attracted by climbing prices.

U.S. crude oil production, driven by shale extraction, hit 9.91 million barrels per day last week, according to government data, the highest level since the early 1970s and close to the output of top producers Russia and Saudi Arabia.

Elsewhere, gasoline futures slid 0.34% to $1.826 a gallon, while natural gas futures lost 0.40% to $2.736 per million British thermal units.