NEW YORK —Oil prices fell more than 1 per cent on Tuesday, with US crude breaking below USD50 per barrel for a second straight day ahead of weekly data that could show a build in domestic inventories.
Producers’ verbal jockeying about the Organization of the Petroleum Exporting Countries’ (OPEC) planned output cut weighed further on the market, analysts said, noting Iraq’s resistance to the plan and its rising output for October.
Brent crude futures fell 64 cents, or 1.2 per cent, to USD50.82 a barrel by 12:52 p.m. EDT (1652 GMT).
US West Texas Intermediate (WTI) crude futures fell 60 cents, or 1.1 per cent, to USD49.92.
Trade group American Petroleum Institute will issue at 4:30 p.m. EDT (2030 GMT) a weekly report of crude stockpiles and other oil supply-demand data, ahead of an official report by the US government’s Energy Information Administration on Wednesday.
Analysts polled by Reuters expected the data would show crude stocks rose 800,000 barrels last week, after a drop of more than 5 million barrels in the week to Oct. 14.
“The sentiment is it’s a bit more negative,” said Scott Shelton, energy futures broker with ICAP in Durham, North Carolina. “There are some expectations that we can see a crude build.”
A rallying dollar, which makes greenback-denominated crude less affordable to holders other currencies weighed further on oil, as did falling Wall Street share prices.
The market is also “a bit rubbery in the knees” due to uncertainty around OPEC’s planned production cut, said Donald Morton, who runs an energy-trading desk at Herbert J. Sims & Co in Fairfield, Connecticut.
Before this week, prices rose about 13 per cent over a three-week span after OPEC announced on Sept 27 its first planned output cut in eight years to combat the steep slump in crude prices, which are far below 2014 highs above USD100 a barrel.
OPEC has invited non-member producers to a technical meeting this weekend to discuss “a road map” for production curbs. Mexico, ranked No. 10 among world oil producers, said it will attend, while Norway, ranked 15th, declined.
OPEC hopes to remove about 700 thousand barrels per day (bpd) from an estimated global supply of 1.0-1.5 million bpd. How much each member should cut will be decided at its meeting in Vienna on Nov. 30.
Non-OPEC member Russia, the world’s No. 3 oil producer, has agreed to support the group on the market. But Iraq, OPEC’s second-largest producer, has sought an exemption from output cuts.