Crude Oil Plunges, Further Offsetting Last Week's Surge

(RTTNews) - Crude oil prices have moved sharply lower during trading on Tuesday, continuing to give back ground following the surge seen last week.

After pulling back modestly over the two previous sessions, crude for December has plunged $1.32 or 2.2 percent to $59.99 a barrel.

The price of crude oil has moved lower for the third straight session after soaring by 7.6 percent over the course of the previous week.

While news of U.S. sanctions against two Russian oil giants contributed to last week's spike, news the German business of Russia's Rosneft would be exempt has led to some uncertainty about the impact of the sanctions.

A report from Reuters indicating OPEC+ is leaning toward another modest increase in production in December has also weighed on oil prices along with lingering demand concerns.

Oil prices will moderate in the next days and weeks to come because of growing production coming from the Americas, OPEC+'s change in policy to increase output and slowing demand growth, International Energy Agency Executive Director Fatih Birol said in an interview on Bloomberg Television.

The oil market will be in surplus as output from the "American quintet" — the U.S., Canada, Brazil, Guyana and Argentina — outpaces the growth in demand, largely driven by China's pivot away from heavy industry and combustion vehicles, Birol said.

Because of surplus capacity, the effect of sanctions on oil-exporting countries will be limited, he added.