Crude oil prices drifted lower on Tuesday as weak economic data from across the globe continued to raise concerns about the outlook for energy demand.
Also, traders were reluctant to go long in futures ahead of weekly inventory data from the American Petroleum Institute (API) and U.S. Energy Information Administration (EIA). The API’s weekly oil report is due later in the day, while EIA is scheduled to release its inventory data Wednesday morning.
West Texas Intermediate Crude oil futures for November ended down $0.45, or about 0.8%, at $53.62 a barrel, after having advanced to $54.84 earlier in the session.
On Monday, WTI Crude oil futures for November ended down $1.84, or 3.3%, at $54.07 a barrel, the lowest settlement in about a month.
Oil’s early uptick was due to a report from Reuters that OPEC’s output fell to the lowest in eight years in September at 28.9 million barrels per day, down 750,000 barrels per day from August’s revised figure.
Oil was also supported by the drop in output in the United States and Russia in September, to 11.25 million barrels and 276,000 barrels per day, respectively.
Data from the Institute for Supply Management showed a continued contraction in U.S. manufacturing activity in the month of September. ISM said its purchasing managers index dropped to 47.8 in September from 49.1 in August. Economists had expected the index to inch up to 50.1.
With the unexpected decrease, the index fell to its lowest level since hitting 46.3 in June of 2009, the last month of the Great Recession.
Traders also noted the news about Ecuador’s decision to leave the Organization of the Petroleum Exporting Countries on January 1, 2020 as its government seeks ways to boost revenue.
Ecuador will withdraw from the 14-nation Organization of the Petroleum Exporting Countries (OPEC) from January 1, 2020 because of fiscal problems, the country’s energy ministry said on Tuesday.
Ecuador is reportedly attempting to increase its production of crude oil in a bid to raise more income. The nation had at several occasions not compiled with the output quota fixed by OPEC.
The material has been provided by InstaForex Company – www.instaforex.com