Having rallied to 16-month-highs on the back of OPEC's deal to cut oil supply, oil prices dipped on Tuesday after figures showed that November output at both OPEC and Russia had reached record highs in November.
As of 7:46 AM (EST), WTI Crude had dipped 1.49 percent at US$51.02, while Brent Crude was trading down 1.04 percent at US$54.37.
OPEC's November production jumped by 370,000 bpd from October to stand at 34.19 million bpd, a Reuters survey based on shipping data and information from industry sources found on Monday. Within OPEC, output rose mainly in Angola, Nigeria, Libya, Iran, and Iraq.
This figure is way higher than the 32.5 million bpd OPEC set as a ceiling in its deal to reduce collective production. In that agreement, OPEC said that its cuts, which are to begin in January, are contingent on non-OPEC nations, including Russia, cutting around another 600,000 bpd.
Another worry to traders was the fact that Russia's output increased to 11.21 million bpd last month-the highest level since the Soviet era. Deputy energy minister Kirill Molodtsov said Russia would use the November figures as reference to cut 300,000 bpd it has pledged to help OPEC cut global supply.
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Analysts are already seeing that the euphoric rally since last Wednesday's deal is starting to wane after seeing high production figures being reported for OPEC and Russia.
"Most of the position adjustments that the OPEC decision forced upon traders have now run their course and it leaves the market exposed to profit taking," Ole Hansen, head of commodities strategy at Saxo Bank, told Reuters.
"The meeting on Saturday between OPEC and non-OPEC producers will be crucial in order to maintain the bullish sentiment seen since last Wednesday," the analyst noted.
Recent reports and indications by 'NOPEC' point to most non-OPEC countries agreeing that cuts are needed and some, such as Russia, pledging specific figures for cuts.
The market is (again) left hinging on another meeting.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More