- Uncertainty surrounding OPEC output cuts weigh on oil prices.
- Signs of economic slowdown in the U.S. cause risk-aversion.
After extending Monday’s upsurge during the first half of the day on Tuesday, crude oil reversed its course during the NA trading hours and the West Texas Intermediate settled slightly higher. With the latest weekly data published by the American Petroleum Institue showing a higher-than-expected in the U.S. crude oil supplies, the WTI pushed lower in the post-settlement trade and was last seen trading at $52.50, losing nearly 1% on a daily basis.
According to the API, crude oil inventories rose by 5.4 million barrels in the week to November 30 to 448 million to surpass the analysts’ forecast for a decrease of 2.3 million barrels. “U.S. crude imports rose last week by 243,000 barrels per day to 8.2 million bpd,” the API said in its publication.
Ahead of the critical OPEC meeting, Reuters reported that OPEC+ was looking to introduce an additional supply cut of 1.3 million barrels but added that Russia was not on board with that plan at the moment. Commenting on today’s price action, “Now we’re starting to get uncertainty on both the trade and production cut fronts and the market is giving back those gains. Some of the optimism surrounding the easing of trade tensions seems to be evaporating,” Gene McGillian, director of market research at Tradition Energy in Stamford, Connecticut, told Reuters.
Meanwhile, the falling U.S. T-bond yields and heightened concerns over an economic slowdown in the U.S. weighed on the risk-sensitive commodities as well.
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