Singapore: US crude futures fell below $74 on Tuesday, extending losses for a second day, as expectations of higher crude inventories fed fears that a slowdown in global economic growth was hitting demand.
Investors took profit on oil after equities slid on skepticism that governments can boost growth, while the yen clung near a 15-year high against the dollar.
US President Barack Obama’s Monday remarks on additional steps to generate jobs growth and a rise in US consumer spending in July failed to lift oil and equities markets.
US crude prices are meeting considerable resistance above $75 due to concerns about the economy and high oil inventories, Stefan Graber, Credit Suisse’s commodities analyst, said in a note. “For now, we expect further consolidation around $75.”
US crude for October delivery fell 84 cents, or 1.12%, to $73.86 a barrel by 0439 GMT, after halting three days of gains on Monday.
ICE Brent for October fell 68 cents to $75.92 a barrel.
Crude stocks to rise
Oil fundamentals in the United States, the world’s largest consumer, remained weak as stockpiles rose for the second time in a row last week on higher imports, a preliminary Reuters poll of analysts ahead of weekly inventory reports showed.
The average of 10 forecasts called for a 1.3-million-barrel crude stock build in the week to 27 August, with eight analysts expecting an increase.
The Energy Information Administration revised down the US oil demand in June, but consumption was still at its highest level since October 2008.
“It has been a disappointing market for this summer,” said Keiichi Sano, general manager of research for SCM Securities in Tokyo.
The crude market could have been stronger as supplies usually tighten during the driving and hurricane seasons, he said.
Three storm systems in the Atlantic basin were expected to steer clear of key oil and gas-producing areas in the Gulf of Mexico, the US National Hurricane Center said on Monday.
In Asia, the Singapore Mercantile Exchange debuted with four contracts on Tuesday — euro-dollar currency futures, gold, West Texas Intermediate crude oil, and Brent crude priced in euros.
The SMX November WTI contract was last traded at $73.96 a barrel by 0443 GMT, lower than the NYMEX equivalent, which traded at $75.15. Brent was last traded at €61 a barrel.