Brent crude traded near its lowest closing level in nine months on speculation that supplies remain sufficient to meet demand. West Texas Intermediate was near a six-month low.
Futures were little changed in London. In Iraq, Kurdish exports remain unaffected by turmoil that also has spared supply from the nation’s south, home to more than three-quarters of its crude output. Libyan lawmakers ordered feuding militias and other groups to end their fighting. Crude stockpiles remain above last year’s level in the U.S., the world’s biggest consumer, according to the Energy Information Administration.
“Market participants are overestimating the current level of oversupply on the market, while at the same time underestimating the risks of future production outages,” Carsten Fritsch, an analyst at Commerzbank AG in Frankfurt, said in a report.
Brent for September settlement rose 3 cents to $104.62 a barrel on the London-based ICE Futures Europe exchange at 12:52 p.m. local time. It closed at $104.59 yesterday, the lowest since Nov. 7. The European benchmark crude was at a premium of $7.61 to WTI, after closing at $7.67 yesterday. The grade has lost 5.6 percent this year.
WTI for September delivery advanced 9 cents to $97.01 in electronic trading on the New York Mercantile Exchange. It declined earlier to $96.55 a barrel, the lowest since Feb. 4. The volume of all futures traded was about 5 percent below the 100-day average. Prices are down 1.4 percent this year.
U.S. crude supplies fell by 1.76 million barrels to 365.6 million for the week ended Aug. 1, the EIA, the Energy Department’s statistical arm, said yesterday. They were forecast to decline by 1.55 million, according to the median estimate of 10 analysts in a separate Bloomberg survey.
Gasoline inventories shrank by 4.39 million barrels to 213.8 million, the first drop in five weeks, the EIA said. They were estimated to remain unchanged in the survey.
In Iraq, exports flowed without interruption from the semi-autonomous Kurdish region in the north as well as from marine terminals in the nation’s south, where most of the country’s big oil fields are located. The nation is the Organization of Petroleum Exporting Countries’ second-largest producer, pumping 3 million barrels a day in July, data compiled by Bloomberg show.
“There are more risks to the upside coming from supply than risks to the downside,” Andy Sommer, an analyst at Axpo Trading AG in Dietikon, Switzerland, said by phone. “Prices are a little bit below fair value right now Brent futures should be trading closer to $107 a barrel, he said.
The call by the newly sworn-in members of Libya’s legislature was the latest in what have been largely futile efforts to restore some measure of order after unrest in the north African nation hit its worst levels since the 2011 ouster and killing of Muammar Qaddafi. Libya produced 400,000 barrels a day last month, according to data compiled by Bloomberg.
To contact the reporter on this story: Grant Smith in London at firstname.lastname@example.org
To contact the editors responsible for this story: Alaric Nightingale at email@example.com Rachel Graham