Oil prices dropped for a third session in a row on Tuesday, as weakening demand for gasoline and persistent doubts on whether crude producers will be able to reach an agreement to rein in a worldwide supply glut dragged on the market. Growth in gasoline use has been one of the strongest pillars supporting demand across the fuel complex in both North America and Asia and has been largely credited for providing a floor under crude prices that have slumped as much as 70 percent since mid-2014 due surplus supply.
The decline on Tuesday follows data showing U.S. gasoline demand during January fell for the first time in 14 months, while overall U.S. oil demand fell 1 percent that month from a year ago. Front month U.S. West Texas Intermediate ( WTI) crude was trading at $35.51 per barrel at 0652 GMT, down 19 cents from their last settlement. International Brent futures were down. “Crude prices and timespreads have weakened in recent days in line with softer fundamentals,” consultancy Energy Aspects said. “Although Q2 is always a slow period for crude demand amidst peak refinery works, it seems like Asia may have somewhat overdone the crude buying and is therefore pausing for breath.” In Asia, traders have stored excess gasoline on tankers as onshore storage facilities in Singapore and Malaysia are filled to the rims.