Crude oil prices were all over the place on Tuesday, but have fallen to $US74, their lowest level of the day, in mid-afternoon trade.
Earlier on Tuesday, oil prices were trading near $US76.50 a barrel. Tuesday’s decline marks a more than 2.3%, or $US1.78, decline for oil.
The volatility came as headlines crossed regarding discussions on potential production cuts between various oil ministers ahead of OPEC’s Thursday meeting in Vienna.
Prices rebounded a bit off of their lows following a WSJ report that OPEC ministers were near an agreement on production cuts.
The report from the Journal’s Benoit Faucon, Summer Said, and Sarah Kent said that, “Saudi Arabia, the de facto leader of the Organisation of the Petroleum Exporting Countries, is likely to side with calls for the group to adhere more closely to its self-imposed production ceiling at Thursday’s meeting of OPEC oil ministers, according to a Gulf official familiar with the Saudi position.”
This report followed headlines from Reuters earlier on Tuesday that said Venezuela, Russia, Mexico, and Saudi Arabia will “monitor” oil prices for a year, but did not agree to any output cut.
Reuters reported that Venezuela officials said a meeting with Saudi Arabian oil minister Ali Al-Naimi did not result in the agreement for any output cut. The parties agreed to meet again in three months.
Mexico and Russia are not OPEC members.
The Journal’s report noted that OPEC agreed three years ago to a 30 million barrels per day production limit, though member nations have regularly exceeded this limit.
Both of these reports come just two days ahead of the latest OPEC meeting, which some in the market have expected would result in a production cut from the oil exporting cartel.
And as Business Insider’s Linette Lopez reports, this news is particularly bad news for Venezuela, which has seen inflation go through the roof and currency reserves fall to an all-time low.
The declining price of oil will provide no relief to the South American nation, and perhaps make the situation worse for Venezuela, as the country needs oil to be around $US85 a barrel in order to pay for imports and keep up with debt payments.
Oil prices, which have slid more than 30% in the last several months, have been pressured by a global economic slowdown and a glut in supply, and many expected OPEC to announce an agreement on some sort of production cut to curb price declines.
In recent days, oil prices had rallied a bit, with WTI moving from about $US73.50 a nearly $US77 a barrel, before resuming their decline on Tuesday.
NOW WATCH: Money & Markets videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.