Crude futures are falling hard on Tuesday on reports that a global economic slowdown will likely have a detrimental effect on worldwide oil consumption.
West Texas crude was recently down $6.79 at $138.39 a barrel on the New York Mercantile Exchange. Earlier in the session, futures for West Texas crude were down as much as $9.26 a barrel.
Brent crude is down $5.92 at $138.00 a barrel. Reformulated gasoline is moving 17 cents lower at $3.38 a gallon, and heating oil is losing 15 cents at $3.91 a gallon. Near-term natural gas is down 42 cents at $11.54 per million British thermal units.
Chairman Ben Bernanke said in a testimony to the U.S. Senate Banking Committee that high energy prices, tight housing markets and difficult credit conditions represent significant risks to U.S. economic growth.
Oil consumption would likely slow if economic growth declined, because oil is a major feedstock for most industrial activity.
Elsewhere, OPEC reduced its estimated growth rate for global oil consumption in 2008 to 1.20% from 1.28%, saying that high oil prices were hurting demand for the commodity.
Meanwhile, energy stocks are getting hammered by falling oil prices in Tuesday's trading session.
is losing 3.1% at $85.73,
is falling 2.1% at $90.84,
Royal Dutch Shell
is down 1.9% at $74.81, and
is losing 1.9% at $83.79.
ETF, an exchange-traded fund that closely tracks the performance of WTI futures contracts on the Nymex, is down 5.2% at $111.36.