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Why Oil Prices Slumped to 2013 Low

Tuesday, 26 Feb 2013 | 2:48 PM ET
An employee walks past a conveyor belt carrying barrels at a Royal Dutch Shell processing plant.
Andrey Rudakov | Bloomberg | Getty Images
An employee walks past a conveyor belt carrying barrels at a Royal Dutch Shell processing plant.

U.S. oil prices closed at the lowest level of 2013, after falling below $92 a barrel intraday Tuesday.

Brent crude is down nearly $2, trading below $113 a barrel, poised for the lowest settlement price since Jan. 29.

(Read More: US Manufacturing to Take Off on Cheap Energy: Pickens)

Here's what traders say is contributing to the selloff:

Commodities Tomorrow: Oil Outlook
With U.S. oil prices at the lowest levels of the year, traders are looking ahead to the U.S. Energy Department's weekly gauge of oil inventories on Wednesday. CNBC's Sharon Epperson reports that analysts are expecting crude supplies to have risen by 2.6 million barrels in the past week.
  • Italy's election stalemate has escalated worries over the eurozone debt crisis and fuel demand
  • Iran's talks with Western nations over its nuclear program have reduced the geopolitical risk premium in the oil markets
  • Refineries resuming operations after planned maintenance or shutdowns has caused a big slide in refined fuels, dragging down overall oil market.

Gasoline futures are down 2.5 percent, also at their lowest levels in a month. Prices were pressured after Motiva Enterprises announced earlier Tuesday it is restarting operations at its gasoline-making unit in Port Arthur, TX. Motiva is joint venture between Royal Dutch Shell and Saudi Aramco.

(Read More: Pro: Why It's Time to Get Into Nat Gas)

—By CNBC's Sharon Epperson; Follow her on Twitter: @sharon_epperson

Disclaimer

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Featured

  • Patti Domm

    Patti Domm is CNBC Executive Editor, News, responsible for news coverage of the markets and economy.

  • A CNBC reporter since 1990, Bob Pisani covers Wall Street from the floor of the New York Stock Exchange.

  • Sharon Epperson is CNBC's senior commodities and personal finance correspondent.

  • JeeYeon Park is a writer for CNBC.com. Follow her on Twitter: @JeeYeonParkCNBC

  • Rick Santelli joined CNBC Business News as an on-air editor in 1999, reporting live from the floor of the Chicago Board of Trade.

  • Senior Producer at CNBC's Breaking News Desk.

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