West Texas Intermediate oil fell for a ninth day, the longest stretch of declines since 2009, after supplies rose at Cushing, Oklahoma, the contract’s delivery point. Gasoline slipped to a one-month low.
Cushing stockpiles rose by 447,000 barrels to 20.9 million last week, Energy Information Administration data showed. Gasoline inventories increased 579,000 barrels to 214.3 million as demand slipped. Brent fell to a one-month low amid signs Libyan oil exports will gain.
“I was expecting to see Cushing supplies sink, so the build caught me a bit by surprise,” said Tom Finlon, Jupiter, Florida-based director of Energy Analytics Group LLC. “The Libyans appear to be making progress and are taking a pragmatic approach about returning their oil to the market.”
WTI for August delivery dropped $1.11, or 1.1 percent, to end at $102.29 a barrel on the New York Mercantile Exchange, the lowest closing since May 16. Prices have risen 3.9 percent this year.
Gasoline for August delivery dropped 3.52 cents, or 1.2 percent, to $2.9377 a gallon.
U.S. pump prices fell 0.4 cent to $3.645 a gallon nationwide yesterday, the lowest since June 10, according to AAA, the largest U.S. motoring group.
Consumption of gasoline slipped 233,000 barrels a day to 8.94 million, down 3.9 percent from a year earlier. The most Americans in seven years were projected to travel by car over the July 4 Independence Day holiday, Heathrow, Florida-based AAA, the biggest U.S. motoring organization, said in a June 26 statement.
The EIA report was projected to show that gasoline supplies declined by 400,000 barrels in the week ended July 4, according to the Bloomberg survey.
“Gasoline is looking very weak,” said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. “Gasoline demand was anticipated to rise over the holiday because of the improving economy.”
Refineries operated at 91.6 percent of capacity, up 0.2 percentage point from the prior week. Refinery runs climbed to 16.3 million barrels a day, the most since July 2005.
Nationwide crude inventories dropped 2.37 million barrels to 382.6 million, in line with the 2.5 million-barrel U.S. supply drop projected by analysts surveyed by Bloomberg. Stockpiles rose to 399.4 million barrels in the week ended April 25, the most since the EIA began publishing weekly data in 1982.
U.S. crude production increased 72,000 barrels a day to 8.514 million, the most since October 1986. Output has surged this year as a combination of horizontal drilling and hydraulic fracturing, or fracking, has unlocked supplies trapped in shale formations, including the Bakken in North Dakota and the Eagle Ford in Texas.
WTI fell below its 100-day moving average, which stands at $102.46 a barrel today, for the first time since May 5, data compiled by Bloomberg show. Investors typically sell contracts when prices slip below chart-resistance levels. The 14-day relative strength index index reached 33.96 today, the lowest reading since January, according to data compiled by Bloomberg. An RSI below 30 typically signals a market is oversold.
“The RSI is down near 34, which leaves room for WTI to move to the downside,” said Bob Yawger, director of the futures division at Mizuho Securities USA Inc. in New York.
Libya plans to boost exports gradually to avoid disrupting the market, said Samir Kamal, the nation’s governor to the Organization of Petroleum Exporting Countries. Production was 327,000 barrels yesterday, National Oil Corp. spokesman Mohamed Elharari said by phone.
The North African country’s crude output averaged 300,000 barrels a day in June, down 73 percent from a year earlier, according to Bloomberg estimates.
“The market is trying to factor in the return of Libyan barrels,” said Rob Haworth, a senior investment strategist in Seattle at U.S. Bank Wealth Management, which oversees about $120 billion of assets. “About 1.4 million barrels a day disappeared from the market because of the unrest. If all continues to go well we will be getting that crude back.”
Iraq’s south, home to more than three-quarters of its crude output, remained unaffected by fighting between government forces and insurgents from a breakaway al-Qaeda group known as the Islamic State.
Brent for August settlement fell 66 cents, or 0.6 percent, to $108.28 a barrel on the London-based ICE Futures Europe exchange, the lowest closing since May 9.
The European benchmark ended at a $5.99 premium to WTI. The spread dropped to $5.54 at yesterday’s close, the narrowest since June 10.