Oil futures on Tuesday threatened to extend their losing streak to a fourth session, extending a decline attributed in part to skepticism over the ability of OPEC+ to deliver on additional production cuts early next year.
Price action
-
West Texas Intermediate crude for January delivery
CL00,
-0.49% CL.1,
-0.49% CLF24,
-0.49%
was off 9 cents, or 0.1%, at $72.95 a barrel on the New York Mercantile Exchange. -
February Brent crude
BRN00,
-0.53% BRNG24,
-0.53% ,
the global benchmark, was off 16 cents, or 0.2%, at $77.87 a barrel on ICE Futures Europe.
Market drivers
Crude prices ended last week with back-to-back losses after OPEC+ producers on Thursday agreed to voluntarily cut around 2.2 million barrels a day (mbd) of crude from the market in the first quarter of next year, a figure that included a widely expected extension of Saudi Arabia’s 1 mbd voluntary output cut and Russia’s 300,000 barrel a day cut to crude exports.
The voluntary nature of the overall cuts left traders skeptical over whether producers will comply, analysts said. Remarks by Saudi Arabia’s energy minister on Monday signaling that the first-quarter cuts could be extended offered little lasting support.
“Looking ahead, the price action in oil has become increasingly heavy, and if there is not some sort of positive or bullish market catalyst ahead, we are likely to see a test of the 2023 lows in the $67/barrel area” for WTI, analysts at Sevens Report Research wrote in a Tuesday note.
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