Oil Below $72 on Bleak Outlook and High Inventories (USO)

Crude oil declined for the fifth straight day Tuesday, as weary investors digested weaker-than-expected economic data and inventory levels. The United States Oil Fund ETF

is down 1.4% in afternoon trade, to $31.98. U.S. light, sweet crude for October delivery last fell below $72 a barrel today, having traded between $71.45 and $73.05. According to a Reuters report, "Crude oil prices and U.S. equities extended losses after an industry group report showed sales of previously owned U.S. homes dropped more steeply than expected in July." "Existing home data was worse than expected and is putting pressure on everything," Tom Bentz, a broker at BNP Paribas Commodity Futures Inc in New York told Reuters. Since crude oil broke above $80 briefly this summer, it has seen tremendous selling pressure. Markets appear to be pricing in a weaker-than-expected global economic recovery. Tepid output translates to lower demand for energy, including oil and gasoline. The Reuters report also notes that "High inventories, tepid demand and the coming end of driving season have helped pummel gasoline futures." VTB Capital analyst Andrey Kryuchenkov told Reuters that "The bearish trend since Aug. 17 is intact. Economic momentum is slowing, and everyone is worried about it. Both supply and demand fundamentals are weak."