US economic recovery and growing oil inventories

[MikeLigalig.com]

Oil prices plummeted Tuesday for the second consecutive day as investors fretted over the pace of the US economic recovery and growing oil inventories.

New York's main contract, light sweet crude for delivery in October, shed $2.78 to $71.92 a barrel in closing trade, while Brent North Sea crude for October lost 1.96 cents to $74.64.

"We are seeing increasingly poor fundamentals with the lower prices being acknowledged by market participants," said MF Global analyst Mike Fitzpatrick.

Citing "burgeoning inventories, the restricted demand and the poor economic climate," he said prices could drop below the $70 per barrel threshold by the end of the week.

The oil market's continued fall comes despite news of a surprise improvement in consumer confidence in the United States, which slightly boosted stock markets. - AFP