Oct. 23 (UPI) -- Crude oil futures prices turned south in Tuesday morning trading, one day after reports that Saudia Arabia and Russia would work together to balance any supply disruption, and tested support levels.
Brent futures for front-month delivery traded 2.5 percent lower at $77.81 per barrel as of 10:51 a.m. EST, near levels last seen in the first half of September.
As for WTI crude futures for front-month delivery, they were also trading lower with a 2.8 percent decline to $67.50 as of 10:50 a.m. EST.
"We are simply unwinding a lot of the technical exuberance that had been around due to Iranian oil sanctions and the like because there is also talk of the Russians and Saudis pumping more out, " said Christopher Lewis, analyst at Fxempire on a comment about declines so far this week.
Crude oil futures had seen large gains in previous weeks, with WTI rising as much as $76.41 per barrel on Oct. 3, fueled by concern about supply disruptions after the U.S. imposes nuclear program-related sanctions against Iran try to force Tehran into compliance. That WTI futures price level was near four-year highs.
On Monday, Saudi Arabian energy authorities confirmed production is being increased and that the kingdom will work in coordination with other OPEC members and non-members like major producer Russia to help the market reach a balance. The report came from an exclusive interview with Tass, the Russian news agency.
Saudi Arabia Energy Minister Khalid Al-Falih said Monday the kingdom has increased production from 9.9 million barrels per day to 10.7 million barrels per day. He added that decisions will be made at the Dec. 7 OPEC meeting to help balance the market with the help of Russia, which has about 11 million barrels of output per day.
Lewis said that he sees WTI prices unlikely to go below $67 per barrel as there is much market support there, meaning that investors would see those levels as buying opportunities. He described the current market declines as "testing potential support."
In addition, the market is waiting for key data to be released Wednesday by the U.S. Energy Information Administration that will include crude oil stocks for the week ending Oct. 12, 2018. The United States is a major crude oil consumer and inventory levels can impact crude oil prices worldwide.