US refined products futures continued to slide, with RBOB gasoline futures prices hitting a 2010 low as the US summer driving season neared its end.
US crude for October delivery fell $1.05, or 1.44 percent to $72.05 a barrel by 12:07 p.m. EDT (1607 GMT), having traded from $71.45 to $73.05. That intraday low was a penny above the $71.44 low struck on July 7.
Total US crude trading volume neared 400,000 lots at midday in New York, heavy compared to the 30-day average of more than 590,000 lots per session.
October Brent crude fell $1.02 to $72.60.
Crude oil prices and US equities extended losses after an industry group report showed sales of previously owned US homes dropped more steeply than expected in July.
"Existing home data was worse than expected and is putting pressure on everything," said Tom Bentz, broker at BNP Paribas Commodity Futures Inc in New York.
The dollar turned broadly weaker, which helped limit crude oil's losses, industry sources said. The yen rose to a 15-year high against the dollar and was also up against the euro as investors sought a safe haven on fears the global economy is slowing.
The dollar also weakened against the euro and saw the dollar index slip after the US home sales report.
US crude oil stocks were forecast to have risen 800,000 barrels last week, according to a preliminary Reuters poll of analysts on Monday, ahead of American Petroleum Institute data due on Tuesday at 4:30 p.m. EDT (2030 GMT) and US government data on Wednesday at 10:30 a.m. EDT (1430 GMT).
US combined crude oil and products stocks instead rose to a record high in the week to Aug. 13.
High inventories, tepid demand and the coming end of driving season have helped pummel gasoline futures.
On Tuesday, US September RBOB gasoline futures fell 2.32 cents, or 1.23 percent, to $1.8578 a gallon, but traded as weak as $1.8368, lowest since prices fell to $1.8263 on Dec. 17, 2009. US September heating oil fell 1.51 cents to $1.9403 a gallon.
The September refined products contracts expire on Aug. 31.
Oil prices have fallen by around 13 percent since hitting a three-month high of $82.97 a barrel in early August as evidence mounted that a fuel demand recovery is likely to be protracted even as inventories stayed well above year-ago levels.
"The bearish trend since Aug. 17 is intact. Economic momentum is slowing, and everyone is worried about it. Both supply and demand fundamentals are weak," said VTB Capital analyst Andrey Kryuchenkov.
Oil prices so far have had scant lift from Hurricane Danielle, which weakened in the Atlantic Ocean and posed no threat to Gulf of Mexico operations.
But analysts said the market would still show caution, with the potential for future storms likely to support oil at around $70 a barrel.
"The fact that we have yet to enter the most critical part of the hurricane season (September) should prevent complacency and likely force the market to hold $70 support," said Edward Meir, senior commodity analyst at MF Global.
