Yahoo Finance Here's Why Oil Prices Slipped Today
After four sessions of gains that brought prices to their highest levels in more than a year, oil futures slipped on Tuesday. By midday, January WTI prices were down nearly 1.85%, while February Brent Crude prices were down about 1.75%.
Tuesday’s oil trading seems to be a result of weary traders cashing in on recent gains ahead of the U.S. inventory data announcement and before OPEC can backpedal on its promise to slash output by more than 1 million barrels a day (b/d).
The American Petroleum Institute will give an update on U.S. supplies later in the day Tuesday, while the Energy Information Administration will release its own weekly data on domestic oil inventory Wednesday morning.
Russia also appears to be skeptical that OPEC will actually cut back its stated amount, as the central bank of Russia announced that it has no plans to adjust oil price estimates for next year despite the agreement.
Saudi Arabia has already displayed signs of retreat from the recent OPEC deal; the defacto leader of the cartel announced Tuesday that it will cut its January price for Asian consumers to a fourth-month low, maintaining its defensive strategy to hold on to its market share.
Of course, this move does not necessarily say anything about Saudi Arabia’s specific plans to cut production, but it does speak to the nation’s desire to maintain its place in the global energy market. OPEC has until January 1 to reach its stated production cut goal.
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