Crude oil futures plummeted on Tuesday as the futures market awaits OPEC’s announcement regarding a possible production cut, according to Bloomberg MarketWatch.
January West Texas Intermediate crude fell $1.85, or 3.9%, to settle at $45.23 a barrel on the New York Mercantile Exchange.
January Brent crude, the global benchmark, declined $1.86, or 3.9%, to end trading at $46.38 a barrel on London’s ICE Futures Exchange. The current Brent contract expires at Wednesday’s settlement.
In September, OPEC tentatively agreed on production cuts of 200,000 to 700,000 barrels a day. Analysts say if the Wednesday meeting ends inconclusively, we could see oil prices fall as low as $35 a barrel. The meeting is expected to begin on Wednesday at 3 a.m. Central Time or 10 a.m. local time in Vienna.
OPEC’s secretary general is scheduled to hold a news conference immediately following the decision.
In the U.S., where many oil producers were forced out of the market when prices dropped below $40 a barrel, the latest government forecasts show domestic crude production is likely to hit 8.7 million barrels a day in 2017, which is 100,000 barrels a day higher than the previous estimate.
Meanwhile, January natural gas fell half a cent to end trading at $3.315 per million British thermal units on the New York Mercantile Exchange.
The Energy Information Administration will release its weekly data on domestic crude oil and petroleum product supplies early Wednesday. The American Petroleum Institute is set to issue its data late Tuesday.
Analysts polled by S&P Global Platts anticipate a decline of 250,000 barrels in crude oil stockpiles.