West Texas Intermediate declined after inventories of gasoline expanded for a third week in the U.S., the world’s largest oil consumer. Brent was steady in London.
Futures decreased as much as 0.4 percent in New York after rising 0.7 percent yesterday. Gasoline stockpiles expanded by 3.38 million barrels, compared with a projected gain of 1 million, according to an Energy Information Administration report yesterday. Crude stockpiles at Cushing, Oklahoma, the biggest U.S. oil-storage hub, dropped by 1.45 million barrels to 18.8 million, the least since November 2008, the report showed.
“High refinery runs in the U.S. are translating into a gasoline stock build as we are starting to look at the end of the gasoline season,” Olivier Jakob, managing director at Petromatrix GmbH in Zug, Switzerland, said by e-mail. “The declining gasoline crack is putting pressure on the flat price of crude oil,” while low crude stocks in Cushing are keeping front-month WTI at a premium to later contracts, he said.
WTI for September delivery was at $102.88 a barrel on the New York Mercantile Exchange, down 24 cents, at 9:36 a.m. London time. The contract increased 73 cents to $103.12 yesterday. The volume of all futures traded was 22 percent above the 100-day average for the time of day. Prices have advanced 4.6 percent this year.
Brent for September settlement was 8 cents lower at $107.95 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude traded at a premium of $5.09 to WTI on ICE, compared with $4.91 yesterday.
Fuel Supplies
U.S. crude inventories nationwide fell by almost 4 million barrels to 371.1 million in the week ended July 18, said the EIA, the Energy Department’s statistical arm. Supplies were down for a fourth week, the longest run of declines since January. They were forecast to decrease by 2.9 million barrels, according to the median estimate in a Bloomberg News survey of nine analysts.
The peak U.S. driving season typically starts on Memorial Day, which came on May 26 this year, and runs through Labor Day on Sept. 1.
Distillate inventories, including heating oil and diesel, rose by 1.64 million barrels last week, the EIA report shows. An increase of 2 million was projected in the survey.
“The long-run story has not changed, global supply still looks healthy,” Barnabas Gan, an economist at Oversea-Chinese Banking Corp. in Singapore, said by phone. “The global growth tailwinds are expected to continue, and that does give oil investors a reason to see higher prices in the short term.”
In China, a preliminary Purchasing Managers’ Index from HSBC Holdings Plc and Markit Economics was at 52 for July, topping the median prediction of 51 in a separate Bloomberg survey and June’s final level of 50.7. Readings above 50 signal expansion.
The Asian country will account for about 11 percent of global oil demand this year, compared with 21 percent for the U.S., according to the International Energy Agency in Paris.
Source: Bloomberg
