Oil Sinks Below $120

Crude oil futures are falling hard for the second day in a row Tuesday, as traders lose interest in Tropical Storm Edouard in the Gulf of Mexico and instead focus on bearish indicators for the global supply and demand of crude.

Texas light crude for September delivery was recently down $2.05 at $119.36 a barrel at the New York Mercantile Exchange, and Brent crude was losing $2.66 at $118.02. Reformulated gasoline was 5 cents off at $2.95 a gallon, and heating oil was falling 4 cents at $3.31 a gallon.

Near-term natural gas was edging 7 cents higher at $2.95 per million British thermal units.

Base and precious metals, along with energy commodities, have all experienced sharp downturns in the past few days, suggesting the latest downturn in commodities is not isolated to the energy space. "In energy's case, it seems that the market is losing interest in geopolitical and weather-induced props, and instead is becoming more aware of growing supply/demand imbalances," Edward Meir, commodity analyst at MF Global, wrote in a research note Tuesday.

Meir added that the $121-a-barrel support band that had propped up crude over the past two weeks has given way, opening the market to the possibility of further selling.

Meanwhile, energy stocks are mostly weaker in Tuesday's trading session. BP (BP Quote) is edging down 0.3% at $59.94, Chevron (CVX Quote) is down 1.1% at $96.53, Total (TOT Quote) is sliding 0.6% to $73.62, but Exxon Mobil (XOM Quote) is adding 1.8% at $77.96.