Crude oil drops almost 2%, settles below $78 per barrel

The largest one-day drop in oil prices since July 1 occurred on Tuesday, with crude oil for September delivery dropping $1.48, or 1.9%, to $77.50 per barrel.

Tom Bentz, an analyst at BNP Paribas in New York stated that again oil treaded near the $80 line, and again that line was not sustained. He added that after the consumer confidence report came through, the selling momentum gained tremendous speed, which in turn caused sell-stop orders.

Following a steep decline in June, consumer confidence plummeted in July due to worries about jobs and business conditions. It dropped from 54.3 to 50.4 in July, the lowest customer confidence index level since February.
Also, after six declines, Standard & Poor’s announced a second 1.3% rise in costs of single-family homes in major metropolises in the US. Nevertheless, according to the index preparers, a more profound look at the past year’s prices does not spell a recovery for the housing market.

Some support for oil has been garnered from stocks. Opening higher and retaining gains after the data, equities still fluctuated. The last three sessions saw stock rising.On Monday, after continuously holding flat, oil settled at $78.98.
Natural gas though deviated wildly for August numbers, and on Tuesday, posted gains. A rise of 1.4%, or 6 cents was recorded, which brought the numbers to $4.68 per million British thermal units.

The August numbers for reformulated gasoline dropped 4 cents, or 2%, to $2.06 a gallon.
A meagre demand in crude oil stockpiles was recorded, as they have fluctuated less vigorously than expected in the past weeks.A drop of 2.3 million oil barrels is predicted by the analysts surveyed by Platts on the week that ends on July 23. A rise of 1.1 million barrels is expected of gasoline stocks, and the distillates like heating oil and diesel, are to rise 1.8 million barrels.