Oil futures were under pressure Tuesday for a second day in a row, pressured by expectations for a rise in U.S. crude inventories and remarks that cast doubt on Russia’s enthusiasm for deeper production cuts as part of its agreement with the Organization of the Petroleum Exporting Countries.
West Texas Intermediate crude for December delivery CLZ19, -1.02% fell 96 cents, or 1.7%, to $54.85 a barrel on the New York Mercantile Exchange, poised for the lowest finish in a week. December Brent BRNZ19, -0.47% gave up 52 cents, or 0.8%, to $61.05 a barrel on ICE Futures Europe. Oil ended lower Monday, unable to keep pace with a stock market rally that lifted the S&P 500 to its first record close since late July.
“The energy patch tried to correlate to the S&P 500 early in the session on Monday, but talk around the oil patch about storage builds weighed on the market, and eventually stopped out some of the length that had built up over the past three days,” said Robert Yawger, director for energy at Mizuho Securities U.S.A., in a note.
The American Petroleum Institute, an industry trade group, is expected to release its estimate of last week’s inventories to members after the closing bell Tuesday. It’s watched as a guide to the Energy Information Administration’s official tally due Wednesday morning.
Analysts surveyed by S&P Global Platts look for the EIA to report U.S. crude inventories rose by 2.5 million barrels for the week ended Oct. 25, while gasoline stocks are forecast to fall by 2.5 million barrels. Distillate inventories are expected to show a drop of 2.4 million barrels.
Meanwhile, Russian news agency TASS quoted Russian Deputy Energy Minister Pavel Sorokin calling talk about deeper production cuts by OPEC and its allies premature, news reports said.
In other energy trade, November natural-gas futures NGX19, +5.27% rose 6% to $2.593 per million British thermal units ahead of its expiration at the settlement. It had rallied Monday rally on the back of forecasts for winter weather and extreme short positioning.