Crude oil accelerated on Tuesday and US futures contracts suffer from the most subdued one-day loss in over three years, due to constant concerns about weakening global demand and excess supply.
Futures contracts for the United States closed 7.1 percent, recording a record drop of 12, and the lowest since November 2017. Over 980,000 contracts changed the owner, because the funds lost their positions.
"It's like running in a bank," said Phil Flynn, an analyst at Price Futures Group in Chicago. "It comes to the point where it no longer seems that it's about the basics, but about the total price drop."
Traders argued that the sale was an extension of Monday, which was introduced after US President Donald Trump published a tweet that would put pressure on the Organization of Oil Exporting Countries not to reduce supply to raise prices.
In Trump's report, weekend reports appeared that Saudi Arabia was considering a reduction in production at the December OPEC meeting, due to an increased alarm that supply began to overtake consumption.
Speculators withdrew from heavy plants at the oil rally, which continued on Tuesday, traders said. Since last week, hedge funds and other money managers have reduced their long position in oil contracts to the lowest since August 2017.
Traders said that the recent weakness of the stocks led to fears of global growth, which also contributed to the fall in oil prices.
Futures contracts for US crude oil supplies reached USD 4.24 per barrel, or 7.1 per cent, to USD 55.92 per barrel. It was the largest one-day percentage drop in the contract since September 2015. The raw material in the US lost 28 percent from the beginning of October.
Brent ended the decline by $ 4.65, or 6.6 percent, to $ 65.47 a barrel, the largest loss since one day since July. Brent lost 25 percent from the highest level for four years at the beginning of October. It is currently on levels that are not visible from March.
In the monthly report, OPEC said the global demand for crude oil next year will grow by 1.29 million barrels per day (bpd), by 70,000 barrels less than expected last month and the fourth consecutive forecast. However, productivity grew by 127,000 barrels to 32.9 million barrels a day, OPEC reported.
Saudi energy minister Khalid al-Falih said on Monday that OPEC agreed that next year it will be necessary to reduce oil supply by about 1 million barrels a day compared to October, to prevent oversupply.
Even when the Saudis promised to cut production, production in the US reached 11.6 million barrels a day last week, which is a new record. Russia gave mixed signals about the reduction, and vice-president Lukoil Vagit Alekperov said on Monday that he did not think that cutting was necessary.
"They can not give up thinking," said Bob Yawger, director of the future of energy in Mizuho. – These strange comrades no longer look as if they were already in the same bed.