WTI crude closed on Tuesday just above $ 37, while brent closed slightly above $ 40 Investing.com — futures closed slightly lower on Tuesday during a volatile, choppy day of trading after dropping below $ 37 a barrel to fall to its lowest level since early 2009.
On the New York Mercantile Exchange, WTI crude for January delivery traded between $ 36.64 and $ 38.58 a barrel, before settling at $ 37.52, down 0.10 or 0.28% on the session. Since opening the month above $ 42 a barrel, U.S. crude futures have slumped nearly 10% over the last week. WTI crude has hovered near multi-year lows throughout the year, amid a glut of oversupply on global energy markets.
On the Intercontinental Exchange (ICE), brent crude for January delivery wavered between $ 39.83 and $ 41.45 a barrel, before closing at $ 40.28, down 0.47 or 1.15% on the day. On Tuesday morning, North Sea brent futures hit a fresh seven-year low as the aftershocks from OPEC’s semiannual meeting last week sent prices crashing below $ 40 a barrel. Both brent and WTI crude futures fell more than 6% on Monday to drop to levels last seen during the Financial Crisis.
Meanwhile, the spread between the international and U.S. domestic benchmarks of crude stood at $ 2.56, below Monday’s level of $ 3.03 at the close of trading.
At a closely watched meeting last week, OPEC left its production ceiling unchanged at 30 million barrels per day ignoring calls to slash output from near-record highs. For the majority of this year, OPEC production has eclipsed the ceiling by more than 1 million bpd in an apparent effort to squeeze out higher-cost U.S. shale producers. Crude prices have crashed by more than 80% over the last 18 months, as record supply throughout the world continues to severely outpace demand.
Many energy analysts were optimistic that OPEC members could reach a consensus on a long-term output strategy to help boost prices from multi-year lows. Instead, the world’s largest cartel delayed a decision at least six months until it meets again next June.
On Tuesday, Russia deputy finance minister Alexei Moiseev told Reuters that the major oil producer will need to enact additional spending cuts if the price of oil falls to $ 20 a barrel. U.S. crude futures are approaching their level of $ 25 a barrel in March, 2002, after oil prices tumbled in the wake of the September 11 terror attacks. In September, analysts from Goldman Sachs (N:) forecasted that oil could fall as low as $ 20, while adding there was a “very high possibility,” that prices could stay depressed until the end of next decade.
Last week, reports surfaced that Russia and Saudi Arabia were unable to agree on a deal to curb their respective production levels ahead of the meeting. In October, both major oil producers pumped more than 10 million bpd, in spite of the prolonged slump in prices.
Investors expect U.S. supply levels to continue to approach record-highs when the American Petroleum Institute releases its weekly crude stockpile report on Tuesday after the close of trading. Separately, Wednesday’s government report could show that U.S. crude stockpiles rose by 0.1 million barrels for the week ending on Dec. 4. U.S. supplies have increased in each of the last 10 weeks, nearing their highest level at this time of year since at least 1935.
The , which measures the strength of the greenback versus a basket of six other major currencies, fell mildly to an intraday low of 98.36. Last week, the index reached a 2015-high at 100.55, before crashing more than 2.35% on Thursday when European Central Bank president Mario Draghi spooked global foreign markets by instituting limited easing measures at a meeting in Frankfurt.
Dollar-denominated commodities such as crude become more expensive for foreign purchasers when the dollar appreciates.
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Crude rallies barely after falling under $37 for first time since 2009
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