West Texas Intermediate traded at its lowest in almost six months before economic data from the U.S., the world’s biggest oil consumer. Brent crude held near a four-month low.
Futures were little changed in New York and London today after declining last week. The Markit Economics purchasing managers index for U.S. services is due tomorrow, while factory order data is also scheduled this week. In Iraq, militants seized control of two oil fields and some predominantly Kurdish towns in the north after clashes, according to Northern Oil Co.
“The oil market has settled into a dangerous state of complacency,” Carsten Fritsch, an analyst at Commerzbank AG in Frankfurt, said in a report. “Market participants are doing an excellent job of ignoring the geopolitical risks. The price slide is doubtless attributable to the withdrawal of financial investors.”
WTI for September delivery was at $97.59 a barrel in electronic trading on the New York Mercantile Exchange, down 29 cents at 8:36 a.m. local time. The contract slid 0.3 percent to $97.88 on Aug. 1, the lowest close since Feb. 6. The volume of all futures traded was about 7 percent below the 100-day average. Prices are down 0.8 percent this year.
Brent for September settlement fell 19 cents to $104.65 a barrel on the London-based ICE Futures Europe exchange. It slipped 1.1 percent to $104.84 on Aug. 1, the lowest settlement since April 2. The European benchmark crude was at a premium of $7.04 to WTI, compared with $6.96 on Aug. 1.
WTI declined 4.1 percent last week amid signs of weaker U.S. fuel demand. Gasoline supplies rose to the highest level in four months as average consumption of the fuel dropped to the lowest since May, even after the country’s peak driving season started with the Memorial Day holiday on May 26.
Markit’s final reading of a gauge for U.S. services is projected to be 60.8 in July, down from 61 in June, according to a Bloomberg News survey. Factory orders probably rose to 0.6 percent in June, a separate survey shows.
Hedge funds and other money managers trimmed their bullish bets on WTI, extending the drop from this year’s peak in June to 22 percent, U.S. Commodity Futures Trading Commission data show. Net-long positions fell 1,375 to 276,741 futures and options combined in the week ended July 29, according to the CFTC.
For Brent, money managers raised net bullish bets for the first time in five weeks in the period to July 29, data from the ICE exchange showed today. Speculators increased net-long Brent positions by 3 percent to 120,695 contracts.
In Iraq, the Ain Zala and Batma oil fields are under full control of Islamic State, a breakaway al-Qaeda group, according to the state-run Northern Oil Co. The fields have a combined output of 30,000 barrels a day. The Sunni Islamist militants last month occupied the Qayyara field north of Baghdad.
Fighting has spared supply from Iraq’s south, home to more than three-quarters of its crude output. The nation is the second-largest producer in the Organization of Petroleum Exporting Countries, pumping 3 million barrels a day in July.
Libya’s Ras Lanuf terminal, closed along with the port of Es Sider for the past year by political feuding, is scheduled to operate today, Oil Ministry Director of Measurement Ibrahim Al-Awami said by phone today.
Britain dispatched naval vessels to evacuate its citizens as an additional 22 people were killed as a result of militia feuds near Tripoli’s international airport. The nation holds Africa’s biggest oil reserves.