Crude oil futures are falling ahead of Tuesday's daytime session at the New York Mercantile Exchange.
The November West Texas crude contract is down $1.72 at $107.65 a barrel in electronic trading, and Brent crude was recently losing $2.14 at $103.90 on the ICE exchange.
Reformulated gasoline is sliding 5 cents at $2.66 a gallon, heating oil is 4 cents lower at $3.00 a gallon, and near-month natural gas is up 8 cents at $7.74 per million British thermal units.
Overnight strength in the U.S. dollar is likely contributing to the weakness in energy futures markets Tuesday morning.
Meanwhile, major stock indices in Europe and Asia fell Tuesday because of the growing likelihood that European and U.S. economies will prove to be recessionary in the current quarter.
A litany of financial news stories questioning value beneath the
is applying a very introspective tone to Tuesday morning's markets.
Crude oil demand, already severely wounded by direct damage to consumer pocketbooks because of high oil prices, will take additional hits from any major global economies that do prove to be recessionary. Europe's economy has already shown definitively that it was recessionary last quarter.
Furthermore, energy demand in emerging markets like China, which has fallen significantly from last spring's levels, will lose demand faster and faster if its two biggest foreign customers enter recessions.
It was only yesterday that
in a single session, with the October contract spiking above $130 a barrel before the contract's expiration. The late afternoon spike was caused by a squeeze play related to the contract's expiration, but investment chatter about possible good news for oil demand because of the U.S. bailout juiced the markets into overdrive long before the spike occurred.
Monday's price spike did not reignite the possibility of another bull-run in commodities, as some media outlets were suggesting. Rather, the spike was a clear, piercing signal that another major financial market in the U.S. is fundamentally flawed, and the U.S. economy still has some major changes to make if it wants this financial crisis to come to an end anytime soon.
U.S. Oil Fund
, an exchange-traded fund that tracks the daily performance of the spot WTI contract, was trading just below the flatline ahead of Tuesday morning's opening bell.