Crude oil prices dropped sharply on Tuesday, with WTI falling by more than 4 percent as traders appear spooked by the consumer price index, which increased by 3.1 percent from November 2022 to November 2023, The Labor Department said on Tuesday. The CPI rose 0.1 percent from October to November, the most recent data showed.

While inflation fears contributed to falling oil prices, the commodity has struggled to find its footing since OPEC+ disappointed the markets with voluntary production cuts from its members that are set to take place on January 1. Saudi Arabia and Russia account for 1.5 million barrels per day (bpd) of the 2.2 million bpd of cuts—but those cuts were already agreed upon and in place and therefore do not represent additional production cuts. Oil prices sank immediately after the disappointing news, and prices have since failed to recover.

WTI was trading at $68.27 per barrel at 1:50 pm ET, a loss of 4.26% on the day—and the lowest level since June. Prices are now roughly $8 per barrel below where they were before OPEC announced its 2024 plan. Brent crude was trading at $73 per barrel at that time, a loss of 4.1% on the day and also the lowest level since June.

Energy prices fell 2.3 percent in November, according to the Consumer Price Index released today.

The CPI figures are still quite a bit above the Fed’s 2% target. A 2.3 percent dip in energy prices put a lid on inflation, with gasoline falling 6 percent, and fuel oil falling 2.7%. On an annual basis, energy was down 5.4 percent.

Another catalyst for moving oil prices is set to occur later today when the American Petroleum Institute publishes its crude oil and products inventory report.