Investing.com – Crude oil prices settled lower on Tuesday, as investors awaited weekly inventory data expected to show crude oil supplies fell for a second-straight week amid concerns that the sharp uptick in crude prices could encourage U.S. shale producers to ramp up production.
On the New York Mercantile Exchange crude futures for November delivery fell by 16 cents to settle at $50.42 a barrel, while on London's Intercontinental Exchange, Brent lost 15 cents to trade at $55.97 a barrel.
A day after crude prices fell 3% following a Reuters survey indicating that Opec ramped up output in September, OPEC Secretary-General Mohammad Barkindo attempted to ease concerns over falling compliance with the deal to curb output.
Compliance with the oil output cut deal between OPEC and non-OPEC nations is extremely high, OPEC Secretary-General Mohammad Barkindo said on Tuesday.
Investors, however, weighed the bullish comments against expectations of an uptick in US shale output as the rise in crude oil prices - above $50 a barrel – has spurred drilling activity.
“… In the bigger picture, oil is looking to see if it can hold $50 as we enter what is rationally weak demand period for oil,” Phil Flynn, senior market analyst at Price Futures Group said.
The advent of autumn is traditionally associated with weaker oil demand as it marks the end of the summer driving season. That trend, however, could be less prevalent this year as refineries are expected to replace lost supply following earlier disruptions from Hurricanes Irma and Harvey.
“Yet the traditional shoulder season for oil is off as Hurricane Harvey, Irma have made it necessary for many refineries to put off maintenance to replace lost supply and to keep up with growing global demand.” Flynn added.
U.S. crude inventory data from the American Petroleum Institute on Tuesday as well as a further report from EIA on Wednesday are expected to show an decrease in U.S. crude inventories for the second-straight week.