But the market has been especially weak lately, falling roughly 18 percent since mid-July, because fears of a powerful Atlantic hurricane season have so far proved unwarranted and because traders are increasingly skeptical that a diplomatic standoff between the United Nations and Iran will lead OPEC's No. 2 producer to pull supplies from the market.

Moreover, these factors have caused some of the speculative fervor underpinning energy markets to dry up, analysts said.

The selling "seems to be feeding on itself," said Michael Gross, a commodities analyst at Liberty Trading in Tampa, Fla. "A lot of big funds that trade oil are trend players."

Bill O'Grady, a commodity analyst at A.G. Edwards & Sons, sees the decline in oil as part of a broader slump for commodities prices at a time when central banks around the world are raising interest rates.

As it becomes more expensive to borrow money and economic growth further cools, O'Grady said investors are likely to shift away from assets he considers to be somewhat risky, such as real estate, emerging-market equities and commodities.

Light sweet crude for October delivery fell $1.85 to settle at $63.76 a barrel on the New York Mercantile Exchange — the lowest closing price for front-month futures since finishing at $61.77 a barrel on March 22.

Nymex oil futures have fallen every day the exchange has been open in September.

October Brent on London's ICE Futures exchange fell $1.56 to settle at $62.99 a barrel on Tuesday.

O'Grady said that in order for oil prices to rise there needs to be "an underlying current of strong economic growth." Geopolitical uncertainty will no doubt add volatility to energy markets, but it cannot be the only foundation for soaring oil prices.

On Monday, the Organization of Petroleum Exporting Countries said it will keep pumping crude at current levels, while also making clear it would consider scaling back production if oil prices keep plummeting.

Some OPEC members, including Iranian Oil Minister Kazem Vaziri Hamaneh, have suggested that crude oil prices shouldn't be allowed to fall below $60 a barrel.

---

E-mail: bwallace@desnews.com