LONDON (SHARECAST) - Crude oil stocks turned 1% lower on Tuesday as US stocks fell sharply in the last hour of trade and after an API report showed a surprise increase in inventories.
Crude for August delivery declined 76 cents to settle at $77.85 a barrel on the New York Mercantile Exchange.
An unexpected drop in US existing home sales and fresh woes from Europe soured sentiment.
Fitch Ratings lowered its rating on major French bank BNP Paribas while Standard & Poor's increased its forecast on loan losses for Spain's banking sector.
Meanwhile The American Petroleum Institute said oil supplies rose by 3.68m barrels in the week ended June 11, bigger than forecasts of a 1.5m gain. Gasoline stocks rose by 810,000 barrels while distillates increased 1.07m.
Goldman Sachs didn’t provide much cheer for oil either after it lowered its 2011 price forecast for oil to $100 a barrel from a previous forecast of $110 on concern about the fragility of commodity markets fears about about slowing growth in China and Europe.
Among precious metals gold futures settled flat in thin trade. August gold closed up $0.10 at $1240.80 an ounce on the Comex division of the New York Mercantile Exchange after a choppy session. Gold closed at a record $1,258.30 an ounce on Friday.
