WTI Settles Below $50 a Barrel on Tuesday as Traders Worry About Iraq, Domestic Inventories

00102_Crudeoildown041516

West Texas Intermediate crude oil futures settled below $50 a barrel on Tuesday, as traders were pressured by Iraq’s aversion to OPEC’s proposed production plan and anxiously awaited the weekly status of U.S. oil inventories, according to Bloomberg MarketWatch.

On the New York Mercantile Exchange, December WTI crude slid 56 cents, or 1.1%, to settle at $49.96 a barrel, marking the first finish below $50 since October 17.

On the London ICE Futures Exchange, December Brent crude lost 67 cents, or 1.3%, to end trading at $50.79 a barrel.

Over the weekend, Iraq said it should be exempt from any deal to scale back production as it needs the oil revenue to fund its continuing war against Islamic State militants. Some news reports said Iraq is only willing to freeze output at its September level. The country produced 4.78 million barrels a day last month. Iraq is the second biggest OPEC producer after Saudi Arabia.

“What traders do not like is back paddling, and when you look at the OPEC potential supply agreement, you have so many players saying different things,” said Naeem Aslam, chief market analyst at ThinkMarkets. “The picture is incredibly muddy and this is dragging the price of oil lower.”

Meanwhile, analysts are watching the weekly changes in domestic crude oil inventories and productions. Analysts surveyed by S&P Global Platts estimate a growth of 400,000 barrels in U.S. crude oil stocks for the week ending October 21 as some refineries are still completing seasonal maintenance.

November natural gas fell 5.7 cents, or 2%, to settle at $2.774 per million British thermal units on the New York Mercantile Exchange. The settlement was the lowest since September 7 and continues a recent streak of lower settlements for natural gas.