Oil down as record U.S. stockpiles heighten glut worry
Oil prices fell 2 per cent on Thursday, as the market took a closer look at U.S. government data that showed growing inventories of gasoline and other oil products pushed total petroleum supplies in the No. 1 oil consumer to record highs.
In the previous session, Brent and U.S. crude futures rose by up to 1 per cent after the Energy Information Administration (EIA) said crude inventories dropped 2.3 million barrels last week, versus forecasts for a 2.1 million-barrel decline. It was the ninth straight weekly draw.
Still, U.S. crude inventories are at a historically high 519.5 million barrels for this time of year, the EIA said. Also, total U.S. crude and oil product stocks rose 2.62 million barrels to an all-time high of 2.08 billion barrels as gasoline stocks posted a surprise build of 911,000 barrels during summer driving season.
Adding to that, market intelligence firm Genscape reported a build of 725,176 barrels for the week to July 19 at the Cushing, Oklahoma delivery point for U.S. crude futures, traders said.
“The market is technically weak, inventories are still high for summer, maintenance season is not far off and we have floating barrels at sea to top it all,” said Pete Donovan, broker at Liquidity Energy in New York.
Brent crude closed 97 cents, or 2.1 per cent, lower at $46.20 a barrel.
U.S. West Texas Intermediate (WTI) crude settled down $1, or 2.2 per cent, at $44.75.
ABN AMRO senior energy economist Hans van Cleef said Brent could slip toward the $42-$43 level. “Near-term, there are still some downside risks.”
Phil Davis, trader at PSW Investments in California, pointed to the 4.2 million-barrel build of “other oils” cited by the EIA, which eclipsed the gasoline build.
Those other oils include special gas for smaller airplanes and less-known industrial oils, which refiners typically crank out when there was too much gasoline and distillate supply, Davis said.
Oil down as record U.S. stockpiles heighten glut worry - The Globe and Mail
Oil prices fell 2 per cent on Thursday, as the market took a closer look at U.S. government data that showed growing inventories of gasoline and other oil products pushed total petroleum supplies in the No. 1 oil consumer to record highs.
In the previous session, Brent and U.S. crude futures rose by up to 1 per cent after the Energy Information Administration (EIA) said crude inventories dropped 2.3 million barrels last week, versus forecasts for a 2.1 million-barrel decline. It was the ninth straight weekly draw.
Still, U.S. crude inventories are at a historically high 519.5 million barrels for this time of year, the EIA said. Also, total U.S. crude and oil product stocks rose 2.62 million barrels to an all-time high of 2.08 billion barrels as gasoline stocks posted a surprise build of 911,000 barrels during summer driving season.
Adding to that, market intelligence firm Genscape reported a build of 725,176 barrels for the week to July 19 at the Cushing, Oklahoma delivery point for U.S. crude futures, traders said.
“The market is technically weak, inventories are still high for summer, maintenance season is not far off and we have floating barrels at sea to top it all,” said Pete Donovan, broker at Liquidity Energy in New York.
Brent crude closed 97 cents, or 2.1 per cent, lower at $46.20 a barrel.
U.S. West Texas Intermediate (WTI) crude settled down $1, or 2.2 per cent, at $44.75.
ABN AMRO senior energy economist Hans van Cleef said Brent could slip toward the $42-$43 level. “Near-term, there are still some downside risks.”
Phil Davis, trader at PSW Investments in California, pointed to the 4.2 million-barrel build of “other oils” cited by the EIA, which eclipsed the gasoline build.
Those other oils include special gas for smaller airplanes and less-known industrial oils, which refiners typically crank out when there was too much gasoline and distillate supply, Davis said.
Oil down as record U.S. stockpiles heighten glut worry - The Globe and Mail
