Brent Slips Below $60, Russia Feels The Squeeze

Brent crude oil prices continued their decline and ended Tuesday below $60. The commodity was steady at $59.38 at 9:00 GMT on Wednesday morning as investors continued to worry about the effects of supply outpacing demand through 2015.

Despite the falling prices, oil producing nations have shown no signs of letting up on production. In November, OPEC elected not to cut production, largely under Saudi Arabia’s influence. The kingdom has stuck by its decision not to lower output, denying claims that the move was aimed at undermining production in non-OPEC members like the US and Russia. Still, Saudi officials have discounted prices for Asian and US customers in an effort to gain market share, saying they will not agree to an OPEC production cut unless producers outside the cartel also cut back on their output.

However, CNBC reported that Russia has vowed to maintain its output despite growing pressure on the nation’s economy. The ruble has taken a nose dive over the past few days, creating panic throughout the nation. The effects of Western sanctions coupled with the decline of crude prices have wreaked havoc on the nation’s economy and prompted the central bank to sell $7 billion worth of its foreign currency holdings in order to keep the ruble afloat. 

Moving forward, US inventory data will be in the spotlight as investors look for a better picture of the number one oil consuming nation’s demand. Data from the American Petroleum Institute showed that the nation’s crude inventories increased by 1.9 million barrels last week. Now, investors will look to the Energy Information Administration’s own version of the same report, due out later in the day.