By Polya Lesova & Moming Zhou, MarketWatch
NEW YORK (MarketWatch) -- Oil futures fell on Tuesday, as members of the Organization of the Petroleum Exporting Countries agreed to leave output quotas unchanged and as data showed the U.S. economy grew at a slower pace than anticipated.
Limiting crude's losses, analysts expect weekly data to show a drop in U.S. crude inventories last week. The U.S. dollar was trading lower against the euro, potential adding upward pressures to commodities prices.
Crude oil for February delivery, the new front-month contract, dropped 39 cents, or 0.5%, to $73.33 on the New York Mercantile Exchange. It fell as low as $72.79 earlier.
"Despite support from cold weather in the U.S. and Europe, and signs that U.S. demand is beginning to recover, crude oil will face sustained headwinds if it pushes past $80 per barrel again," said Greg Priddy, global oil analyst at Eurasia Group.
In Angola's capital Luanda, members of the OPEC oil cartel decided to make no changes to current production quotas. The decision was in line with market expectations.
Last week, OPEC said in its monthly report that the 11 members bound by production quotas produced 26.6 million barrels a day of crude in November, up for an eighth straight month.
The cartel's rate of compliance with its quotas fell to 58% last month, according to a MarketWatch calculation. That's the lowest level since the cartel said it will cut production by 4.2 million barrels a day starting from the beginning of this year.
In the U.S., the Commerce Department reported that gross domestic product rose 2.2% from July through September, comparing with a 2.8% gain the department had reported previously.
The third-quarter GDP growth rate was slower than expected, but the pace was the fastest in two years. Before the quarter, the U.S. economy had shrunk for four straight quarters for the first time since the Great Depression. See story on GDP.
Traders are also awaiting the latest data on U.S. petroleum inventories.
The American Petroleum Institute will release its report at 4:30 p.m. Eastern on Tuesday. The Energy Information Administration will announce its more closely watched data at 10:30 a.m. on Wednesday.
Analysts polled by Platts expect a decline of 2 million barrels in commercial crude stocks for the week ended Dec. 18. They also project an increase of 1.3 million barrels in gasoline inventories and a decline of 2.25 million barrels in distillate stocks.
"The projected decline in U.S. commercial crude stocks is in line with seasonal tendencies as refiners run down inventories due to end-of-year tax considerations," said Linda Rafield, Platts senior oil analyst.
"Not unusually, tankers are kept out at sea until the beginning of the new year, keeping import levels at low levels," she said in a note.
In other energy trading, January gasoline was up 0.1% at $1.871 a gallon, January heating oil fell 0.3% to $1.9399 a gallon, and January natural gas lost 1.7% to $5.757 per million British thermal units.
The United States Oil Fund (USO 36.15, -0.01, -0.03%) gained 0.2%, and the United States Natural Gas Fund (UNG 10.26, -0.10, -0.96%) fell 1.3%.
