- Gasoline supply projected to climb for third week in survey
- BP profit slips on low oil price, weaker refining margins
Oil dropped to a three-month low in New York amid speculation that U.S. fuel stockpiles increased, bolstering a glut in the world’s biggest crude-consuming nation.
West Texas Intermediate oil fell 0.5 percent. U.S. gasoline supplies probably grew by 200,000 barrels last week, swelling stockpiles already at the highest seasonal level in at least two decades, according to a Bloomberg survey before a government report. Crude inventories, which are projected to have dropped a record 10th week, are also at the highest seasonal level in decades.
Crude has slipped more than 15 percent since early June after nearly doubling from a 12-year low in February as supply disruptions from Nigeria to Canada trimmed a worldwide surplus. BP Plc, the first oil major to report second-quarter results, missed analyst estimates as lower prices continued to erode income and refining margins shrank.
"Concerns about fuel inventories are weighing on the market," said Gene McGillian, a senior analyst and broker at Tradition Energy in Stamford, Connecticut. "We are looking for further growth in gasoline supplies and there’s still a lot of crude in the tanks."
WTI for September delivery dropped 21 cents to settle at $42.92 a barrel on the New York Mercantile Exchange. It’s the lowest close since April 25. Total volume traded was down 20 percent from the 100-day average at 4:40 p.m.
Futures extended declines from the settlement after the industry-funded American Petroleum Institute was said to report crude supplies at Cushing, Oklahoma, the nation’s
biggest storage site and the delivery for WTI, rose 1.38 million barrels last week. WTI traded at $42.64 at 4:39 p.m in New York.
Brent for September settlement rose 15 cents to close at $44.87 a barrel on the London-based ICE Futures Europe exchange. The global benchmark crude ended the session at a $1.95 premium to WTI.
U.S. crude stockpiles were at 519.5 million barrels in the week ended July 15, more than 100 million barrels above the five-year average, according to data from the Energy Information Administration. Crude production increased for a second week to 8.49 million barrels a day as the nation’s drillers put rigs back to work. Last June, U.S. crude output reached 9.61 million barrels, the highest in more than 40 years.
"We’ll be keeping an eye on the U.S. crude production number," said John Kilduff, partner at Again Capital LLC, a New York hedge fund focused on energy. "Production is down 1 million barrels from last year and we have to see if the increase in rigs is enough to have an impact."
Analysts project the EIA report will show that stockpiles of distillate fuel, a category that includes diesel and heating oil, climbed 900,000 barrels in the week ended July 22.
- China National Petroleum Corp. said its Changqing field, the country’s biggest oil and gas producer, rebounded from losses earlier this year to post a first-half profit amid reduced spending.
- The reopening of two of Libya’s biggest oil ports may be delayed as the hardening positions of rival factions pose a fresh challenge to international efforts to reunite the country and restore its exports.
- Structural changes are required to keep the North Sea competitive amid low oil prices, Royal Dutch Shell Plc said before workers went on strike.