West Texas Intermediate futures for June delivery closed out at $77.07 per barrel on NYMEX-the lowest front-month finish in nearly a month.
WTI sank $1.69 per barrel, or just over 2%, on Tuesday afternoon as recession fears reinforced doubts about what that means for crude oil demand.
The Brent front-month contract was also down by more than 2% (-$1.96 per barrel), ending the trading day at $80.77 per barrel.
Prices had been trading up earlier in the week after a poor showing last week, but sank as yet another bank-First Republic-created a mini panic in the market when it said on Tuesday that its deposits fell 40% to $104.5 billion in the first quarter of this year.
The first quarter saw two other banks collapse, sparking fear in the market that the occurrence could easily spread into a contagion.
More troubling was the fact that the dropoff in First Republic's deposits was far worse than what Wall Street was anticipating for Q1. Wall Street analysts had estimated First Republic's deposits nearer $145 billion.
First Republic said that its deposit activity began to stabilize during the last week of March and has remained stable since that time, down 1.7% since March 31.
Also weighing down on prices is the fear that the Fed could continue to raise interest rates.
Putting a floor underneath crude oil prices, however, is the expected boost in demand from Asia's May Day Holiday based on booked flights.
Gasoline prices in the United States were also trading down on Tuesday, at $3.656 per gallon, according to AAA data, down from $3.667 per gallon on Monday-or down $0.02 per gallon from a week ago. Gasoline prices are still up month over month.
By Julianne Geiger for Oilprice.com
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Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group. More