Oil performed a lower Tuesday as the focus turned to U.S. inventory stock data.
Brent crude oil was off 27 cents, or 0.48%, at $55.45 at 08:00 ET. U.S. crude shed 26 cents, or 0.49%, to $52.75.
The market was underpinned by fresh sanctions imposed on Iran. The sanctions were imposed by the U.S. after missile testing by Tehran. Iran is encouraged by UN resolutions not to test missiles. However, this is not a binding resolution. Therefore, Iran is technically allowed to test ballistic missiles. Furthermore, last year’s agreement involved nuclear weapons, not conventional ones. President Trump though, seems intent on causing instability through foreign policy.
Increased U.S. drilling could derail the impact of agreed cuts by other major producers. OPEC and also non-OPEC producers recently agreed to cut production by 1.8 million barrels a day. These cuts will go into effect in the first half of this year.
American Petroleum Institute U.S. inventory figures will be out later in the session.
Inventory figures will be followed Wednesday by official Energy Information Administration inventories.
Furthermore, U.S. crude stocks are forecast to increase by 2.4 million barrels in the latest reporting week.