[miningmx.com] — US crude prices fell sharply on Tuesday, slumping a second straight day and posting the first monthly decline since May as concerns about faltering economic growth, weak demand and bulging oil inventories pressured crude and gasoline futures.
The expectation that Hurricane Earl will brush the US East Coast and squelch gasoline demand during the approaching Labor Day holiday weekend added to the bearish sentiment.
US October crude fell $2.78, or 3.72%, to settle at $71.92 a barrel, trading as high as $74.73 and slumping as low as $71.53 in post-settlement trading.
For the month, US crude ended down $7.03 a barrel, or 8.9%, the biggest monthly percentage loss since May, when oil prices hit a 2010 low of $64.24 on May 20, the weakest front-month price since July 2009, after reaching the 2010 peak of $87.15 on May 3.
On Tuesday, October Brent crude dropped $1.96 to settle at $74.64 a barrel.
“End-of-the-month volatility has pulled down crude futures today, with the expiration of refined product futures adding pressure,” said Mark Waggoner, president at Excel Futures in Bend, Oregon.
The market was awaiting weekly oil inventory data from the American Petroleum Institute released after oil’s settlement. With prices already down sharply, there was little reaction to API data that showed crude stocks rose 4.8 million barrels in the week to Aug. 27.
The API said gasoline stocks slipped 589 000 barrel and distillate inventories fell 1.9 million barrels.
Analysts in a Reuters survey ahead of the API report expected a 1.1 million-barrel gain in crude stocks. Gasoline stocks were seen down 200,000 barrels, with distillate stocks expected to be up 1.2 million barrels.
Adding to the bearish sentiment was a report from the Institute for Supply Management-Chicago that showed business activity in the US Midwest slowed in August.
While no US landfall had been projected for Hurricane Earl, authorities voiced concern about a possible “close approach” to the North Carolina coast.