Oil Futures Fall Sharply, Settle At Near Six-month Low
Crude oil prices fell to a six-month low on Tuesday amid lingering concerns about the outlook for fuel demand and worries about possible oversupply in the market.
Also, data showing persisting inflationary pressures reinforced the view that the Federal Reserve is unlikely to cut interest rates anytime soon.
West Texas Intermediate Crude oil futures for January ended down $2.71 or about 3.8% at $68.61 a barrel.
Brent crude futures settled at $73.24 a barrel, down $2.79 or about 3.7% from the previous close.
Worries about oversupply persist despite OPEC+’s plans to reduce output by 2.2 million barrels per day in the first quarter of 2024, as production in the U.S. reached a fresh all-time high of 13.2 million bpd in September, and production in Canada is set to rise by 10% next year to a record high of around 5.3 million bpd.
The Labor Department’s report said the consumer price index crept up by 0.1% in November after coming in unchanged in October. The uptick matched expectations.
Excluding food and energy prices, core consumer prices rose by 0.3% in November after edging up by 0.2% in October. The increase in core prices also came in line with estimates.
The report also said the annual rate of consumer price growth slipped to 3.1% in November from 3.2% in October, while the annual rate of core consumer price growth was unchanged at 4%.
Investors now await weekly oil reports from the American Petroleum Institute (API) and U.S. Energy Information Administration (EIA). The API’s report is due later today, while EIA will release its inventory data Wednesday morning.
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