Oil Prices Drop to near eight-week low

Oil fell for a fourth day on Thursday to the lowest in nearly eight weeks after U.S. data reminded traders that crude stocks are relatively robust and the summer driving season is nearing its end.

U.S. light, sweet crude for September delivery fell 61 cents to $71.28 a barrel, its lowest since June 26. London Brent was down 62 cents to $72.21 a barrel.

U.S. crude prices have shed more than 7 percent after falling for six of the last eight sessions as a ceasefire took hold in the Middle East and BP (BP.L: Quote, Profile, Research) decided to shut in only half of its 400,000 barrel-per-day (bpd) Prudhoe Bay oilfield.

Some dealers had feared the partial closure of the biggest oilfield in the United States might trigger a surprisingly large drawdown in this week's crude inventories, but data on Wednesday showed a decline of 1.6 million barrels, in line with forecasts.

Crude stocks have fallen from the eight-year high reached earlier this year, but still remain higher than almost any time since 1999, giving refiners a sizeable supply buffer to guard against any unexpected disruptions.

Gasoline inventories dropped by a deeper-than-expected 2.3 million barrels, but demand eased from the previous week as the summer driving season, which ends in early September, began to wind down.

"It is this pace of demand deceleration, as well as the plentiful supplies of heating oil, that may set a more modest bearish tone to the market in the weeks after August," said First Energy Capital analyst Martin King.

"WTI crude oil prices treading water more in the range of the very low $70s to very high $60s may be something that materialises, barring any hurricane-induced price spikes."

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