Crude oil prices tumbled on Tuesday as concerns about the outlook for fuel demand offset recent decisions by Russia and Saudi Arabia to extend their production cuts till the end of the year, and prospects of the two countries extending the cuts into 2024.
Data showing a bigger than expected drop in Chinese exports contributed to concerns about the outlook for energy demand from the world’s second largest economy.
Weak economic data from U.K. and the eurozone weighed as well on oil prices. The dollar’s surge hurt as well.
West Texas Intermediate Crude oil futures for December ended lower by $3.45 or about 4.3% at $77.37 a barrel, the lowest close in about three and a half months.
Brent crude futures dropped to $82.18 a barrel, giving up about $3.00 or 3.52%.
“Oil prices declined again on Tuesday, with Brent now erasing the moves that followed the Hamas attack on Israel. Traders will remain on high alert for signs of a wider conflict emerging in the region that could disrupt supplies but it seems those fears are subsiding,” says Craig Erlam, Senior Market Analyst at OANDA, UK & EMEA.
“That we’re seeing data that confirms economies are struggling under the pressure of high interest rates which are not expected to decline soon may also have contributed to oil reversing its gains,” adds Erlam. “It’s no surprise then that Saudi Arabia and Russia remain committed to their end-of-year cuts, it’s just a question of whether they will be extended. That they haven’t already perhaps suggests there’s some reluctance too, which may also be weighing on prices a little.”
Meanwhile, the U.S. Energy Information Administration (EIA) said that it will delay its scheduled data releases for November 8-10, 2023, to complete a planned systems upgrade. EIA will resume its regular publishing schedule on November 13.
EIA said it will publish two weeks of official statistics for the Weekly Petroleum Status Report (WPSR) on November 15 and the Weekly Natural Gas Storage Report (WNGSR) on November 16.
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