U.S. crude oil falls more than 4%, closes at lowest level since December to erase 2024 gains

U.S. crude oil futures fell more than 4% on Tuesday, posting their lowest close since December and erasing all gains for the year.

“A toxic mix of excess supply, sliding demand, bearish technicals, and bad product fundamentals are conspiring to destroy Crude Oil today,” Bob Yawger, executive director of energy futures at Mizuho Securities, told clients Tuesday.

Here are Tuesday’s closing energy prices:

• West Texas Intermediate October contract: $70.34 per barrel, down $3.21, or 4.36%. Year to date, U.S. crude oil has fallen 1.8%.
• Brent November contract: $73.75 per barrel, down $3.77, or 4.86%. Year to date, the global benchmark has dropped 4.3%.
• RBOB Gasoline October contract: $1.97 per gallon, down more than 11 cents, or 5.52%. Year to date, gasoline has fallen 5.9%
• Natural Gas October contract: $2.20 per thousand cubic feet, up more than 7 cents, or 3.57%. Year to date, gas has declined 12.4%.

The move came after a report that Libya’s rival governments could reach a deal that would help restore oil output after days of disruptions. Libya’s eastern government in Benghazi has slashed production in a dispute with the U.N.-backed government in Tripoli over who should head the central bank.

The governor of Libya’s central bank, Sadiq al-Kabir, told Bloomberg that there were “strong” indications the North African country’s rival governments were nearing a deal to end the dispute.

Oil prices were already under pressure as OPEC+ is poised to increase production in the coming weeks, and manufacturing activity in China and the U.S. disappointed the market.

OPEC+ delegates have indicated that the group is still planning to boost oil production in October, sources told Reuters and Bloomberg.

Manufacturing in China, meanwhile, fell to a six-month low in August, according to data released over the weekend. China is the world’s largest importer of crude oil.

And manufacturing activity in the U.S. was slower than expected last month, according to a report from the Institute for Supply Management on Tuesday.

OPEC+, however, made clear in June that it could reverse the planned production increase based on market conditions.

The best course for OPEC+ would be to wait until December given slowing demand in China, Helima Croft, head of global commodity strategy at RBC Capital Markets, told clients Monday.