On Tuesday, oil dropped again after falling the most in two months on Monday on speculation fuel demand could be curtailed by the U.S. economy. In New York, futures were down by 0.7%, which added to the drop of 2.4% on Monday. In less than 60 seconds of trading on Monday, crude dropped over $3, as the options for October were close to expiring.
The general economic index of the Federal Reserve, the Empire State Index, dropped to a low of three years on Monday. The government confirmed it is thinking of ways to prevent the price of oil from curbing the growth of the economy.
Oil for the month of October delivery dropped by up to 64 cents to a barrel price a $95.98 in electronic trading and was at $96.05 in Singapore late Tuesday afternoon. The drop yesterday was the lowest it has closed since September 18 and prices are 2.8% lower now than at the same time a year ago.
November Brent oil fell 29 cents to settle at $113.50 per barrel in London. Yesterday it made a 2.5% drop.
The White House changed its position on the strategic reserves of oil in the U.S., with all options now back on the table, said a government spokesperson. The White House administration continues to look at every option to ensure high prices of oil do not put a crimp into the global economy.
Stockpiles of crude will be announced on Wednesday and are expected to climb by over 1 million barrels according to a number of industry analysts. Gasoline supplies also were expected to increase by over 1.5 million barrels, marking the first gain in over eight weeks.