U.S. oil dips on growth worry, set for monthly loss

By Robert Gibbons

NEW YORK (BestGrowthStock) – U.S. crude prices fell on Tuesday as concerns about stalled economic growth and high U.S. inventories kept oil on track for its first monthly decline since May.

U.S. crude for October delivery fell $1.95, or 2.61 percent to $72.75 a barrel by 12:30 p.m. EDT (1630 GMT), having traded from $72.61 to $74.73. ICE Brent for October dropped $1.64 to $74.96 a barrel.

The market was awaiting U.S. inventory data from the American Petroleum Institute at 4:30 p.m. EDT (2030 GMT), with analysts in a preliminary Reuters poll forecasting a 1.3-million-barrel gain in crude stocks in the week to August 27. (EIA/S: )

Adding to the bearish sentiment was a report from the Institute for Supply Management-Chicago that showed business activity in the U.S. Midwest slowed in August.

But oil regained some ground after data showed U.S. single-family home prices rose more than expected in June and again when the Conference Board said U.S. consumer confidence rose in August.

“Crude got some bounce from the consumer confidence and home price numbers that lifted the stock market, but the (oil) market is cautious ahead of the big jobs number on Friday,” said Richard Ilczyszyn, senior market strategist at Lind-Waldock in Chicago.

Wall Street erased initial losses and moved higher after the consumer confidence and home price reports helped soothe some investor anxiety about the strength of the economy. (.N: )

Still on tap for Tuesday release are the Federal Open Market Committee’s minutes from its August 10 meeting. On Friday, markets will react to the key August U.S. nonfarm payrolls report.

Data from Japan was mixed, with total oil product sales up more than expected in July, but August manufacturing activity expanding at the slowest pace in more than a year.

Crude failed to get a boost from further weakness in the dollar. The yen came within reach of a 15-year high against the U.S. currency, which slipped against the euro. The dollar index (Read more about the global trade. ) (.DXY: ) also weakened.

A weak dollar can boost oil prices because it makes dollar-denominated oil cheaper for buyers using other currencies.


Crude in New York is on track to finish the month down about 6 percent, after rising in July and June.

Prices in May, their most recent month of decline, hit a 2010 low of $64.24 on the 20th day of that month, the weakest front-month price since July 30, 2009, after reaching the 2010 peak of $87.15 on May 3.

Brent has been at an atypical premium to U.S. crude, the result of North Sea supply disruptions and high U.S. stockpiles, especially at the Cushing, Oklahoma, delivery hub for U.S. benchmark West Texas Intermediate.


Traders remain wary of supply disruptions that can occur during the Atlantic hurricane season.

Authorities were worried that powerful Hurricane Earl could brush up against the U.S. East Coast, and in addition to Earl, the U.S. National Hurricane Center was monitoring two other tropical systems in the Atlantic basin.

So far, computer models showed no immediate threat to energy infrastructure in the Gulf of Mexico region.

(Additional reporting by Gene Ramos in New York, Alex Lawler in London, Florence Tan; Editing by Dale Hudson)

U.S. oil dips on growth worry, set for monthly loss