The price of crude oil slipped on Tuesday as concerns augmented regarding higher prices presenting an obstacle for economic development and growth amid the world economy, according to The Wall Street Journal.
Crude oil's recent upward drive is seen as likely to reduce demand. On Friday, the energy commodity achieved its highest value in since April of last year.
Preoccupations about the high price of crude oil were magnified by the U.S. Commerce Department stating durable good orders in January in the U.S. dropped at their quickest pace in 36 months. Economists had anticipated a 1.1 percent drop last month but the figure actually hit 4 percent.
The price of retail gasoline and diesel fuel also climbed to their top price ever for this time of the calendar year.
But one industry observer said the rally is preparing to drop off after crude oil futures had seven consecutive days of gains.
The upward drive is "beginning to show fatigue," president Jim Ritterbusch of Ritterbusch & Associates told The Wall Street Journal, also noting increased concerns in Iran regarding the oil-rich Middle Eastern nation's nuclear program that has raised the eyebrows of western nations. "The geopolitical risk premium related to Iran has stretched this month by as much as $8-$9 a barrel to around $15 a barrel."
Sanctions levied against Iran have prompted some buyers of the nation's oil to look into alternates for their oil needs. Nuclear inspectors with the United Nations departed the Middle Eastern nation after efforts to reduce the tension of the standoff reached an insurmountable impasse.
The inspectors were denied entry to some sites of note despite Iran saying it is working on enhancing its program for nuclear power rather than one for nuclear weaponry.
At 10:35 a.m. on Tuesday, the price of crude oil dropped 0.4 percent, a 50 cent reduction to $123.67 per barrel.
The drop in price marks the second consecutive day of losses that crude oil futures have endured after last week's climb, according to Bloomberg.
The U.S. Energy Department is preparing to release a report indicating supplies of crude oil in January gained to their top amount since September of last year, a Bloomberg poll states.
"The durable goods numbers do not paint a picture of robust demand going forward," market research directors Addision Armstrong with Tradition Energy in Connecticut told Bloomberg. "We're going to see builds in this week's report, which is also putting downward pressure on prices."
The price of oil bounced back from its lowest level during the session on Tuesday as a consequence of U.S. consumer confidence rising this month to its top amount in one year.
That metric instilled a modicum of confidence and optimism for one strategist.
"The consumer confidence numbers show that things aren't as bad as a lot of people thought," chief market strategist Bill O'Grady with Confluence Investment Management in Missouri told Bloomberg. "It makes sense that prices would pop on it."
CNN reports the value of U.S. stocks is set to increase as a result of crude oil futures' draw down. The energy commodity climbed 9 percent in seven days.
The reduction in the price of the energy commodity also has pushed up gas prices as the national average for fuel climbed for 21 consecutive days.
As the price of oil dropped for a second consecutive day on Tuesday, confidence emerged that the economic recovery would not stall.
Developments in the debt-hobbled euro zone also are likely to impact markets and the price of crude oil.
The European Central Bank is preparing to avail regional banks with loan money on Wednesday as a strategy of boosting their liquidity.
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