Oil down sharply as U.S. driving season comes to end

Oil down sharply as U.S. driving season comes to end

Oil futures fell sharply Tuesday, unable to shake off worries about crude demand due to a continued rise in coronavirus cases and the end of U.S. summer holiday driving season.

The U.S. benchmark, West Texas Intermediate crude for October delivery CL.1, -5.90% CLV20, -5.90% fell $2.20, or 5.5%, to $37.57 a barrel on the New York Mercantile Exchange. November Brent crude BRN.1, -3.76% BRNX20, -3.76%, the global benchmark, was off $1.39, or 3.3%, at $40.62 a barrel on ICE Futures Europe, after a 1.5% decline on Monday, when U.S. markets were closed for Labor Day.

Crude was pressured Monday after Saudi Arabia lowered its official selling price for Asian buyers, analysts said, which was taken as a sign of weak demand.

“The key concern for the market remains demand, and with China having restocked in prior months, sizable fresh Chinese buying appears to be absent from the market at the moment,” said Warren Patterson, global head of commodities at ING, in a note.

After record volumes in June, customs data showed Chinese crude imports in August averaged 11.23 million barrels a day, down from 12.13 million barrels in July and well below the record 12.99 million barrels seen in June, he said, noting that on a year-over-year basis, imports remain up 13%.

The decline comes as U.S. driving season, the period between Memorial Day and Labor Day, comes to an end, pointing to seasonal weakness in demand for gasoline.

October gasoline RBV20, -5.21% fell 5.5% to $1.1114 a gallon, while October heating oil HOV20, -6.34% dropped 6.4% to $1.077 a gallon.

October natural-gas futures NGV20, -1.15% were off 1.7% at $2.543 per million British thermal units.

Originally published on MarketWatch

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