Crude oil is little changed on Tuesday trading, yet heading for the sharpest monthly drop since May on signs global recovery is faltering.
Oil for October delivery is currently trading around $88.78 a barrel after recording a high of $88.85 and a low of $88.34. However, oil is heading for a weekly gain this week.
The recent data from global economies is showing that the sluggish growth pace more likely will continue and global economies are in a massive need for another round of stimulus to boost growth.
Yesterday, data showed that U.S. consumer confidence slipped to the lowest level in two years and European economic confidence plummeted the most since December 2008.
In addition, a report released late yesterday showed that supplies rose 5.13 million barrels last week, according to API report, providing evidence that demand on oil from the world's largest crude consumer has weakened, while Gasoline inventories declined 3.11 million barrels to 210.8 million last week.
Later in the day, the EIA report is predicted to show that inventories dropped 500,000 barrels and gasoline inventories fell 950,000 barrels last week.
On the upside, oil prices benefited from Irene hurricane which was threatening 10 operating oil refineries located in the coast producing of 1.21 million barrels a day, where another threat is still imposed by Katia tropical storm which is 885 miles (1,400 kilometers) west of the southernmost point Cape Verde.
On the other hand, oil production from Libya is predicted to come back top full capacity in the coming few weeks as revolts nearly won the battle against Qaddafi troops.
In the FOREX market, the dollar index, which tracks the dollar movements versus a basket of major currencies, inched down to a low of 73.88 compared with the day's opening level of 73.98.