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West Texas Intermediate extended its decline to a second day behind the release of a report showing an increase in US supplies of crude oil and gasoline.
Futures for the American crude with a delivery date in September lost as much as 19 cents today, or 0.2%, to arrive at a price per barrel of $97.18 on the New York Mercantile Exchange. It was trading mid morning Sydney time at $97.24. WTI fell to its lowest since August 7th yesterday when it closed at a price of $97.37. Trading volume was 53% less than the 100 day average.
The American Petroleum Institute released figures yesterday revealing that inventories of crude oil in the US increased last week by 229,000 barrels alongside a similar gain for stockpiles of gasoline. Official statistics from the Energy Information Administration (EIA) is expected out today which analysts surveyed by Bloomberg News say will show a decline in supply in the US, the largest oil consumer in the world.
Resource analyst David Lennox from Sydney's Fat Prophets says that, “The supply situation is adequate. Output from the U.S. is taking care of any growth in their market and the rest of the world is being serviced by OPEC.”
The EIA revised down yesterday its forecast for WTI prices this year after the US’ domestic oil production reached 8.5 million barrels daily in July for the highest level in 27 years. According to their Short-Term Energy Outlook report, they expected each barrel to have an average price this year of $100.45, lower than their previous forecast in July of $100.98.
Brent, the European benchmark, fell yesterday to its lowest value in 13 months behind a glut of supply acting as a buffer between threats from the Middle East. It declined by 0.2%, or 16 cents, to earn a price per barrel of $102.86 in London’s ICE Futures Europe exchange. It held a premium of $5.62 over WTI after closing yesterday at $5.65.
