In the energy market Monday, crude for September delivery fell for the third session in a row, closing at $112.87/barrel, down 90 cents. September reformulated gasoline declined 4.5 cents, to $2.8152/gallon.

It’s all about fundamentals, according to John Kilduff, of MF Global. “Evidence is all around of contracting demand,” Kilduff said. “Road travel is in decline, mass transit ridership is at all-time highs, gasoline sales are down and auto sales are at a multi-year low.”

James Williams, of WTRG Economics, essentially concurred, writing that “the weak economic outlook from the U.S., Britain, the EU, Japan, Korea and even slower growth in China are cutting into demand and putting downward pressure on oil.”

Williams concludes that, “There will likely be a little recovery in U.S. demand from lower prices but not enough to put much pressure on prices … Economic news should be the dominant factor for the coming months.”

Just how much has this market turned? Consider, Williams says, “Iran tests a missile capable of reaching orbit, and who knows where else, and oil is still down … If that happened two months ago we would have had a $5 spike. But, two months back almost anything was good for a $5 spike.”

Source: Crude Drifts Lower – Declining Demand Seen as Driver