Oil to end January on a weaker note, what does it suggest?

Oil prices are down more than 4% from its monthly highs and at current prices are down at least 2.5% compared to December close.

Brent was last seen trading around $55.25/barrel and WTI was seen around $52.40/barrel.

The weakness in oil prices clearly suggests two things – the OPEC deal has been priced-in and the markets are more worried about the rising US oil production.

According to US Energy Information Administration, oil production has increased 6.3% since July 2016 to almost 9 million barrels per day. With Trump at the helm, the US oil supplies could increase at a faster rate.

Oil traders now await the weekly American Petroleum Institute (API) inventory report due later today.