Oil Trades Near Seven-month Low After U.S. Gasoline Supplies Surge
Oil traded near the lowest closing level in seven months as U.S. gasoline supplies unexpectedly rose for a second week.
Futures were little changed in New York after slumping 3.7% Wednesday, the first drop in four sessions. Motor-fuel stockpiles expanded by 2.1 MMbbl last week, the EIA reported. Most analysts surveyed by Bloomberg had forecast a decline. Crude output climbed while nationwide inventories fell less than predicted.
Oil has declined almost 8% this month amid speculation that rising U.S. supplies will offset output curbs by OPEC and its allies, including Russia. New production from OPEC rivals will be more than enough to meet demand growth next year, the IEA said Wednesday in its first forecast for 2018.
“Any build in U.S. commercial stocks gives us an indication of the uphill battle OPEC is facing,” said Tamas Varga, an analyst at PVM Oil Associates in London. “Although last week the big bearish surprise came in the form of significant builds across the board, this time around gasoline was responsible for the consequences.”
WTI for July delivery was at $44.56/bbl on the NYME, down $0.17. Total volume traded was about 68% above the 100-day average. Prices dropped $1.73 to $44.73 on Wednesday, the lowest close since Nov. 14.
Brent for August settlement fell $0.10 to $46.90/bbl on the ICE Futures Europe exchange. Prices slid $1.72, or 3.5%, to $47 on Wednesday. Brent traded at a premium of $2.13 to August WTI.
U.S. crude stockpiles dropped by 1.66 MMbbl last week, the EIA reported Wednesday. Inventories were forecast to decline by 2.45 MMbbl, according to the median estimate in a Bloomberg survey. Production rose by 12,000 bpd to 9.33 MMbpd.
Oil Market News
The Qatar crisis is reverberating in Libya, inflaming political divisions in the war-torn oil exporter and dragging commodity-trading giant Glencore Plc into a dispute over crude sales. Iraq is driving up crude-oil exports to the U.S., the world’s second-biggest import market, just as there are signs Saudi Arabia is honoring a pledge to restrict such deliveries, according to tanker-tracking data.
Source: www.worldoil.com
