LONDON. — Oil fell to a two-month low under $108 a barrel yesterday, extending its longest losing streak in four years, pressured by weak petrol demand in the US and the prospect of rising supply from Libya.
Data showed an increase in US petrol inventories last week, indicating demand was not as strong as expected during the peak summer driving season.

Brent crude fell 31c to $107,97 a barrel by 8.37am GMT, down for a ninth straight session and matching a similar losing run in May 2010. It hit a low of $107.76 earlier in the day, the weakest price since May 9.

US crude was down for a tenth session at $101,78 a barrel, 51c below Wednesday’s close. The front-month price is set to post its longest stretch of losses since July 1984.

A steeper fall in West Texas Intermediate has widened its spread versus Brent to more than $6 a barrel after touching the narrowest in nearly a month on Wednesday.

Concern over supply disruptions in Iraq have eased as exports from southern Basra continued amid an Islamist insurgency.
Libya has restarted an oilfield that could nearly double the country’s production.

“It’s a combination of profit-taking, the Libya effect and I would say a slight reduction in the risk premium regarding the Iraq situation,” said Hans van Cleef, senior energy economist at ABN Amro in Amsterdam.

He added that it would not be surprising to see oil fall to $105 a barrel in the coming months.

China, the world’s second-largest oil consumer, posted a 10,2 percent rise in crude imports in the first six months this year, customs data showed yesterday. Analysts attributed the jump in imports to stockpiling.

The International Energy Agency forecast in June China’s total oil demand would rise by 355 000 barrels a day, or 3,5 percent, for the whole of 2014.

Investors expect Beijing to implement more stimulus measures to support growth, which could lift its fuel demand.

Fuel demand in the US, however, has been a letdown despite a gradual recovery in the world’s largest economy.

“We expect gasoline demand to pick up, but so far, it has not surpassed late May or early June levels,” Societe Generale’s Michael Wittner said in a note.

Petrol demand over the past four weeks was at 9,04-million barrels a day, down 0,4 percent from a year earlier, data from the Energy Information Administration showed on Wednesday.

Stockpiles of the motor fuel rose 579 000 barrels, compared with analysts’ expectations in a Reuters poll for a 217 000-barrel drop. Crude inventories fell 2.4-million barrels in the week to July 4, slightly more than analysts’ expectations for a decrease of 2,2-million barrels. – Reuters.

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