Investing.com -- U.S. crude futures fell sharply to slump to near-two months low on Tuesday, as investors awaited the release of the American Petroleum Institute's weekly crude stockpile report after the bell for further indications on the supply-demand imbalance in domestic energy markets.
On the New York Mercantile Exchange, WTI crude for December delivery traded in a broad range between $42.60 and $43.91 a barrel, before settling at $43.20, down 0.78 or 1.77% on the session. At one point, Texas Long Sweet futures crashed to their lowest level since August 28. U.S. crude futures have fallen by more than 1% in three of their last four sessions.
On the Intercontinental Exchange (ICE), brent crude for December delivery wavered between $46.41 and $47.56 a barrel, before closing at $46.81, down 0.73 or 1.54% on the day. Earlier in Tuesday's session, North Sea brent fell to its lowest level since Sept. 14. Meanwhile, the spread between the international and the U.S. benchmark of crude stood at $3.61, slightly below Monday's level of $3.72 at the close of trading.
On Tuesday after the close of trading, the API will unveil its U.S. crude inventory report for the week ending on Oct. 23, one week after reporting a surprising build of 7.1 million barrels. Separately, Wednesday's government report could show that U.S. crude stockpiles rose by 3.0 million barrels. Last week, the U.S. Energy Information Administration reported that crude stockpiles surged by 8 million for the week ending on Oct. 16. At 476.6 million barrels, U.S. crude oil inventories remain near levels not seen for this time of year in at least 80 years.
U.S. crude production, meanwhile, remained unchanged for the week at 9.096 million barrels per day. A week earlier, output fell by 76,000 bpd to its lowest level on the calendar year. Oil prices are down by more than 40% since OPEC roiled global energy markets last year by leaving its production ceiling unchanged as a mechanism for defending its market share.
OPEC production is expected to remain level until early-December when the world's largest cartel is scheduled to meet next. While smaller OPEC members such as Venezuela are expected to push for raising the floor on crude prices to $70 a barrel, they still lack the clout to overrule Saudi Arabia, OPEC's largest producer. Over the last year, Saudi Arabia has depressed global prices in an apparent strategy to force U.S. shale producers to slash output.
The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, gained more than 0.10% to an intraday high of 97.06.
Dollar-denominated commodities such as crude become more expensive for foreign purchasers when the dollar appreciates.