Oil futures settled at a two-month low Tuesday after the U.S. government announced plans to sell millions of barrels of oil from its Strategic Petroleum Reserve, as traders bet on a further weekly increase in crude supplies.
December West Texas Intermediate crude fell 78 cents, or 1.8%, to settle at $43.20 a barrel on the New York Mercantile Exchange. That was the lowest settlement since Aug. 27. December Brent crude on London’s ICE Futures exchange lost 73 cents, or 1.5%, to $46.81 a barrel.
The government had announced a “test drawdown and sale” of five million barrels from the SPR in March 2014, but the last significant release was in 2011, when the U.S. sold off 30 million barrels to offset lost production from Libya. The SPR has capacity of 713.5 million barrels, but currently holds about 695 million.
WTI oil prices have dropped for two straight weeks, dragging the prices of other energy products with them.
Traders will also be focusing on the Federal Reserve meeting, which ends Wednesday, for hints about the fate of interest rates.