WTI drops below $24 as crude oil selloff intensifies ahead of API stock data

• US producers are expected to cut output by 2 million bpd.
• Iranian oil minister says US and Canada need to play a role in production cuts.
• API will release its Weekly Crude Oil Stock report at 20:30 GMT.

The selling pressure surrounding crude oil intensified during the American trading hours on Tuesday and the barrel of West Texas Intermediate (WTI) plummeted to a daily low of $23.61. As of writing, the WTI was trading at $23.75, erasing more than 9% on a daily basis.

OPEC+ output cut depends on involvement of other producers

This recent price action suggests that markets seem to be having second thoughts about OPEC and non-OPEC producers’ ability to reach an agreement on oil output cuts when they meet on Thursday.

Earlier in the day, Reuters reported that output cuts would be conditional on how much of a production reduction other producers such as the US, Canada, Brazil and others will propose.

Additionally, Iranian Oil Minister Zangeneh said the US and Canada need to play a role when deciding on output cuts. “There needs to be an agreement on production numbers before any future meeting between OPEC and non-OPEC producers,” Zanganeh added.

Meanwhile, the monthly report published by the US Department of Energy revealed that oil producers in the US were expected to lower their output by about 2 million barrels per day even without the government’s involvement.

Investors will be keeping a close eye on the American Petroleum Institue’s Weekly Crude Oil Stock report that will be released at 20:30 GMT. 

Technical levels to watch for