WTI Falls 2% as Economic Data Weighs on Market

 | Wednesday, December 04, 2024 | 4:20 PM EST

Oil fell 2% to settle below $69 a barrel as tepid US economic data undercut OPEC+’s progress on a deal to keep output constrained.

The decline comes after crude futures tested their 50-day moving average, a key level that had spurred some technical buying. But slowing US services activity growth and swelling fuel stockpiles — both signals of weak demand — weighed on the market.

“The failure of WTI to hold above $70 and its 50-day moving average reinforces these levels as resistance,” said Rebecca Babin, senior energy trader at CIBC Private Wealth Group. “Additionally, volumes today are significantly lighter than the 10-day average, indicating this could be a ‘wait-and-see’ market as we approach year-end.”

Crude has been locked in a band of roughly $6 since the middle of October, buffeted by the imminent Donald Trump presidency, geopolitical tensions in the Middle East and Ukraine, and a lackluster demand outlook from top importer China. Mixed energy data from the US on Wednesday further muddied the picture, with weak diesel demand and record oil production offsetting a surprise draw in crude inventories.

Still, fresh US sanctions on Iran’s shadowfleet, and an expected agreement by OPEC+ nations to delay production increases for another three months are keeping a floor under prices. OPEC+ is due to finalize supply plans at an online meeting on Thursday.

Oil Prices:

• WTI for January delivery fell 2% to settle at $68.54 a barrel.
• Brent for February settlement slid 1.8% to settle at $72.31 a barrel.