Oil slumped to the lowest close in seven months this week as concerns grew that rising US supplies will offset the production curbs by the Organisation of Petroleum Exporting Countries and allies including Russia. New non-OPEC output next year will be more than enough to meet demand growth, the International Energy Agency said last Wednesday in its first forecast for 2018.
Current prices reflect fundamentals, said Bill O’Grady, chief market strategist at Confluence Investment Management in St. Louis.
“Inventory levels remain stubbornly high,” he said. “The reality is, the things that have caused this trading range remain in place. Nothing’s changed.”
West Texas Intermediate for July delivery was at $44,59 a barrel on the New York Mercantile Exchange, up 13 cents, at 1015 am in New York.
Total volume traded was 15 percent below the 100-day average. The contract lost 27 cents to $44,46 last Thursday, the lowest since November 14.
Brent for August settlement rose 25 cents to $47,17 a barrel on the London-based ICE Futures Europe exchange.
Prices are down 2 percent this week. The global benchmark crude traded at a premium of $2,37 to August WTI.
“There is really no bullish twist to the latest US data,” said Michael Dei-Michei, head of research at Vienna-based consultants JBC Energy GmbH.
“Implied crude production seems to have moved upwards at a rather rapid pace, US gasoline demand has taken a turn to the downside just as the summer driving season starts and total US oil stocks have not drawn for two weeks.”
Libyan output will reach 900 000 barrels a day within days, National Oil Co. said on its website, citing Chairman Mustafa Sanalla.
OPEC production jumped last month as Libya and Nigeria revived supply halted by attacks and political crises, a report from the group showed on Tuesday. — Bloomberg.