Oil price: Commodity under pressure after huge drop Tuesday

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• Oil prices remain under pressure and look set to extend
  their losing streak into a 13th day.
• Prices dropped as much as 7% on Tuesday after US
  President Trump again pushed back against Saudi Arabia’s
  plans to increase production.
• Analysts fear that the price per barrel of oil could
  fall below $50.
• 
  
  You can track oil prices live at Markets Insider.
  

Oil prices remain under the pump on Wednesday following the
commodity’s worst single day of trading in several months, as
global fears surrounding demand worry investors.

By around 8.50 a.m. in London (3.50 a.m. ET), the price of West
Texas Intermediate, the US benchmark, is down 0.3% to trade at
$55.49 per barrel, while Brent crude, the international
benchmark, is just in the red, down around 0.1% at $65.44. 

If these prices stick, oil will endure a 13th straight day of
losses, further extending its record losing streak.

“It’s been a perfect storm for oil as of late, with lower
global growth expectations, higher output from the US, Russia and
Saudi Arabia, waivers on Iranian sanctions and general risk
aversion in the markets sending Brent and WTI rapidly into bear
market territory,” Craig Erlam, senior market analyst at OANDA,
said on Wednesday.

Tuesday’s drop, which saw both Brent and WTI fall about 7%, was
driven largely by a tweet from US President Donald Trump, in
which he urged Saudi Arabia not to cut production. The tweet came
in response to Khalid al-Falih, Saudi Arabia’s oil minister,
saying the kingdom is likely to cut production by around 500,000
barrels.

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Oil prices have tumbled
into a bear market — down at least 20% from their
October peaks — amid concerns of growing stockpiles. Earlier in
November, the Trump
administration granted eight countries temporary
waivers from the sanctions it placed against Iran that
were designed to cut off its oil from the rest of the
world
 
.

And data released last week by the Energy Information
Agency showed US oil inventories climbed by 5.8 million
barrels in the week to November 2, while production hit a weekly
record of 11.6 million barrels per day.    

The oil market had already been under pressure since the
beginning of October as trade tensions and concerns over rising
interest rates weighed.

Prices may well have further to fall. Erlam said that he
“wouldn’t be surprised to see” prices for WTI to slip to $50 per
barrel, and Brent to $60.

“It’s not too long ago that people were talking about the
prospect of $100 a barrel oil but that now feels like a distant
memory.”

The chart below illustrates the drop in WTI oil prices seen
since its peak in October:

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