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Midday Market Update

Rally Stalls for Oil Prices

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U.S. Markets
The four-day winning run ended for oil prices. Oil was trading at around $50.65 per barrel on Tuesday. Output increased in major export regions ahead of the production cut that OPEC agreed on. Oil producers would surely benefit from the increased prices if everyone abides by the agreement, however, an incentive to produce more to sell at the higher price also exists. Throw the U.S. shale-oil producers into the mix, and it gets even more interesting. Many shale-oil producers have suffered from low oil prices and were barely breaking even. They are likely to ramp up their oil output following the recent price rise.

The S&P 500 and Nasdaq opened Tuesday in the green and were up 0.04% and 0.05%, respectively. The Dow was down 0.06% on news that the U.S. trade deficit rose around 18% to $42.6 billion in October. The Treasury is auctioning four- and 52-week bills later in the day.

Manjul Bhusal Sharma does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.