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What a difference a weekend makes to the outlook of the analytical community focused on crude: whereas last week saw respected institutions predict that oil will skyrocket to $80 later this year, now the experts cite danger signs that herald a significant correction - all because USA crude on Monday dropped again, this time by 2 percent. USA inventories data will be released over the next two days.
Carsten Fritsch at Commerzbank said that "given the magnitude of the stock market selloff the oil drop is still rather moderate and not far away from any kind of panic - we can likely expect it to fall further".
Opec "still has a way to go" in rebalancing the market, Opec Secretary-General Mohammad Barkindo said in an interview yesterday.
U.S. oil production is expected to surpass 11 million barrels per day in late 2018, a year earlier than projected last month, the U.S. Energy Information Administration said on Tuesday.
US West Texas Intermediate (WTI) crude futures were at $63.46 a barrel, down 69 cents, or 1.1 per cent, from their last settlement and more than $3 off their 2018 high. Total volume traded was about 56% above the 100-day average.
Brent crude futures for April delivery settled down 76 cents, or 1.12 per cent at US$66.86 a barrel, after touching a session low of US$66.53, the weakest since Jan 2.
The S&P 500 Index was down 0.3 per cent at 2.40pm in NY after rising into the green earlier in the session.
The Dow Jones Industrial Average's 4.6 per cent loss on Monday was its largest in percentage terms since August 2011, and the day's 1,175 point loss was its biggest ever in absolute terms. "In panic situations, markets tend to move together in a coordinated way".
For the week ended January 26, total U.S. crude stocks increased 6.78 million barrels to 418.36 million barrels, ending 10 consecutive weeks of declines.
US S&P 500 futures tumbled 3 per cent in Asian trade on Tuesday, extending Monday's sell-off.
Iran's armed forces, some of which are under United States sanctions, must divest from energy assets and other businesses to help save the Persian Gulf nation's economy, President Hassan Rouhani said.