Crude oil is is back below $40 per barrel following the commodity's worst month in a year.
West Texas Intermediate crude oil futures — the US benchmark — declined 16% in July, as the bloated level of inventories remained stubbornly high.
WTI is down 3.97% at $39.95 per barrel, its lowest level since mid-April. It closed in a bear market, and 22% down from its June peak.
In June, supply disruptions in Canada and Nigeria supported prices above the $50-per-barrel mark. But crude has stepped lower since then, amid more proof that US inventories and non-US output continue to grow.
As Barclays outlined in a note on Monday, oil demand remains weak this summer — a period when inventories usually fall. This, and macroeconomic uncertainty, means the imbalance between demand and supply is likely to persist for a while longer, the note said.
Meanwhile, the major stock-market indexes are broadly unchanged to start the month, even as the S&P 500 trades above its previous intraday high of 2,177.09.
At 12:24 p.m. ET, the Dow is down 68 points (0.37%), the S&P 500 is down 7 points (0.33%) and the Nasdaq is up 8 points (0.16%).
Tesla shares are down 0.8% and Solar City is lower by 4.8% after the companies announced a $4.6 billion combination.
In US economic data, Markit Economics and ISM both released their manufacturing surveys, which showed that the sector remained in expansion in July. Markit reported an uptick in export sales, while ISM said employment returned to contraction.
Additionally, construction spending fell sharply for a third straight month, shrinking by 0.6% in June.
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