Oil traded near $43 a barrel in NY after industry data showed crude stockpiles at the biggest USA storage hub rose, swelling supplies already at a seasonal record.
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The U.S. Energy Information Administration (EIA) said crude stockpiles rose 1.7 million barrels last week, instead of falling 2.3 million barrels as forecast. Analysts surveyed by Bloomberg ahead of the release had expected a crude inventory decline of 2 million barrels in the week ended July 22.
West Texas Intermediate for September delivery was at $43.21 a barrel on the New York Mercantile Exchange, up 8 cents, at 8:07 a.m. London time.
Hedge funds and money managers reduced the net long position in Brent and WTI futures and options by 31 million barrels to reach 453 million in the last week. The supply of petrol had surged up during the peak season for demand in the US.
Brent futures fell $1.40, or 3.1 per cent, to settle at $43.47 a barrel. Gasoline supplies rose 452,000 barrels to 241.5 million, the highest since April, the report showed.
Oil prices tumbled 2% on Wednesday, hitting two-month lows, after a surprise build in U.S. crude and gasoline inventories despite the peak summer driving season as refiners cut production amid faltering demand and profits. BP Plc, the first oil major to report second-quarter results, said earnings fell 45 percent as lower prices continued to erode income.
Oil prices slipped to fresh three-month lows on Wednesday as worries about a global oversupply resurface ahead of the release of U.S. stockpiles data later in the day. USA crude was down 43 cents at $42.70, having fallen to its lowest since April earlier. A stronger US currency makes dollar-denominated commodities such as oil more expensive to buy.
The build adds to an already huge global refined product glut just as slowing economic growth dents the demand outlook for crude. Breaching those could open the door for more prices drops, traders said.
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“We’ll be keeping an eye on the USA crude production number”, said John Kilduff, partner at Again Capital LLC, a NY hedge fund focused on energy.
