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Crude Oil Crashes as OPEC Doesn’t Finalize Production Cut Deal

December 6, 2018 at 19:43 by Vladimir Vyun

Prices for crude oil logged big losses today as the Organization of Petroleum Exporting Countries failed to finalize the deal to cut oil production as a measure to buoy prices. While the OPEC agreed to reduce output, it did not decide on volumes, waiting for Russia, the biggest non-OPEC producer involved in the deal, to commit. The delay led to speculations that the agreement will not be reached. Saudi Energy Minister Khalid al-Falih told reporter:

I’m not confident but I hope to reach a deal.

The Energy Information Administration reported that US crude oil inventories slumped by 7.1 million barrels last week, much more than was expected. Usually, such a big drop would support prices, but today it was overshadowed by negative news.

Talking about news that is bad for crude, exports from the United States jumped to more than 3.2 million barrels per day. As a result, the USA turned from a net importer to exporter of crude and refined products for the first time since at least 1973.

Futures for delivery of WTI crude oil in January slumped by 3.19% to $51.21 per barrel as of 19:29 GMT on NYMEX today. February contract for Brent crude dropped 2.96% to trade at $59.74 per barrel on ICE.

If you have any questions and comments on the commodities today, use the form below to reply.

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