Crude-oil futures fell in Asian trading Tuesday, extending sharp overnight declines, as cautious investors turn their attention to the global economy and weakening demand for oil.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in October traded at $96.20 a barrel at 0634 GMT, down $0.42 in the Globex electronic session. November Brent crude on London's ICE Futures exchange fell $0.95 to $112.84 a barrel.
U.S. crude futures tumbled dramatically Monday, dropping more than $3 in less than a minute on a huge spike in trading volume as October options were about to expire. The still-unexplained move shook broader markets and sparked confusion across trading floors, dragging down prices of gold, copper and even the euro. The move sparked talk of an erroneous trade--called a "fat-finger" error in industry parlance--or a computer algorithm gone awry.
The big drop reflects an unusually nervous market, in which the oil complex has relied heavily on economic stimulus measures and Middle East tensions to sustain prices, said Jim Ritterbusch, president of oil-trading advisory firm Ritterbusch & Associates.
Oil prices have gained nearly 10% since the beginning of August, and rose last week as investors focused the U.S. Federal Reserve's plan to undertake another round of monetary stimulus and rising tensions in the Middle East.
Market participants have now shifted their focus to supply and weakening demand as the global economy slows. In particular, they are closely watching China, where manufacturing is slowing, for indications that the government will implement additional stimulus.
"The fundamental landscape is looking increasingly bearish," Mr. Ritterbusch said.
Nymex reformulated gasoline blendstock for October--the benchmark gasoline contract--fell 99 points to $2.9334 a gallon, while October heating oil traded at $3.1434, 200 points lower.
ICE gasoil for October changed hands at $985.00 a metric ton, down $25.50 from Monday's settlement.
Write to Jacob Gronholt-Pedersen at jacob.pedersen@dowjones.com
