NEW YORK (TheStreet) -- Crude oil prices were falling as worries about a weakening economic recovery in the U.S. and troubles in Europe took precedence over a debt ceiling deal that would help the country avert a default.
Brent crude oil futures for September delivery were falling 16 cents to $116.65 and West Texas Intermediate light sweet crude oil for September delivery was down 32 cents to $94.57.
"After all of the furor and debate surrounding the debt ceiling in the last few weeks, the passing of a bill in Congress last night with one day to spare has been met by a whimper from the crude complex, as economic concerns dominate sentiment instead," said Summit Energy analyst Matt Smith.
The Commerce Department reported on Tuesday that personal spending decreased for the first time since September 2009, dampening hopes for robust growth going into the summer. The Commerce Department reported that personal spending for June decreased by 0.2%, after a revised 0.1% increase in May.
This comes on the heels of poor manufacturing data released in both the U.S. and China the day before.
Meanwhile, European debt woes have been shifting back into the spotlight, with Italy and Spain's frail economic state back in focus after the U.S. House of Representatives passed critical legislation to raise the country's $14.3 trillion debt limit late Monday by 269-to-161 vote. The Senate is expected to hold its vote on Tuesday.
The American Petroleum Institute is expected to release its weekly crude oil inventory report at 4:30 p.m. ET on Tuesday and the Energy Information Administration is scheduled to release its report at 10:30 a.m. ET Wednesday. A 2 million-barrel build is expected, according to analysts polled by Platts.
"Traders will try to find solace in this week's [Department of Energy] statistics, but they might not find any. The picture is starting to become more bearish, with the economy looking quite weak," said Cameron Hanover analysts.
Natural gas futures for September delivery were falling 0.3% to $4.176 per million British thermal units as supply concerns stemming from the formation of Tropical Storm Don faded and temperatures began to moderate.
Under 1% of Gulf of Mexico natural gas production stays shut after the storm, according to the Bureau of Ocean Energy Management, Regulation and Enforcement.
A Cameron Hanover report says temperatures in the Texas-Kansas mid-continent corridor are forecast to be hot, but readings will likely be more moderate in the Great Lakes and along the East Coast.
"There is nothing out there that suggests we will see a repeat of the brutally hot weather across most of the country that we had two weeks ago."
Oil and gas stocks were drifting lower. Exxon(XOM) was falling 0.7% to $79.08, EOG Resources(EOG) was losing 0.9% to $100.74 Forest Oil(FST) was slumping 1.3% to $26.06, GeoMet(GMET) was behind 1.9% to $1.03, Cheniere Energy(LNG) was tumbling 2.2% to $10.25, Williams Companies(WMB) was down 0.4% to $31.48 and EQT Corporation(EQT) was falling 1.1% to $63.27.
