E U.S. Crude Falls Below $50 Threshold As Oil Falls Over 1% Before Inventory Data

Oil prices slumped on Tuesday as the industry awaited inventory data. The price of oil fell by more than 1% in afternoon trade as U.S. crude falls below the $50 mark for the second straight session. Concerns of domestic inventory growth is causing the slump on Tuesday.

Brent crude futures fell 1.2% to $50.82 a barrel. U.S. West Texas Intermediate (WTI) fell 1.1% to $49.92 a barrel.

Inventory data will be released by the American Petroleum Institute at 4:30 EDT.

Official data from the Energy Information Administration will be released on Wednesday. Supplies fell by 5 million barrels for the week ended October 14. Reuters polled analysts that point to an 800,000-stockpile gain.

Opteck CFDs, an indicator of investor concerns, saw an uptick in contracts for differences on Tuesday as investors remained concerned about a strengthening dollar and lower oil prices.

OPEC announced on September 27 that the members had agreed to an oil output freeze. The announcement sent oil prices up 13% over a three-week period. OPEC has not planned output levels in over eight years, raising investor sentiment of a possible strengthening in the commodity.

Iraq announced that it does plan to enter the production agreement, which put pressure on the commodity on Monday. The country is the second largest producer in OPEC and has sought an exemption from the oil production freeze.

The country is fighting back ISIS forces, and production cuts could result in less revenue to help combat missions.

Russia, the world’s third biggest producer of oil has agreed to support OPEC.

Non-members have been invited to join in on a technical meeting this weekend to help stabilize oil prices. Norway declined to go to the meeting. The country is the 15th biggest producer of oil in the world. Mexico, the world’s 10th largest oil producer, agreed to attend the meeting.

Baghdad may get a pass from the oil production cuts, according to some analysts. Iraq argued that they will not be able to cut oil as revenue is badly needed to fight ISIS in Mosul.