The products markets have dictated the price trend for crude over the past two weeks as demand for motoring fuels surged in the run-up to the peak US summer driving season.
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The US inventory report on Wednesday said, gasoline stocks climbed 680,000 barrels to 218.49 million in the week to June 19. A steady decline in USA crude stockpiles from a record high earlier this year has been supporting prices and inventories probably fell by 2.1 million barrels last week, the eighth consecutive drop, according to an analyst poll.
West Texas Intermediate for August delivery was at $60.20 a barrel in electronic trading on the New York Mercantile Exchange, down 18 cents, at 11:35 a.m. Sydney time.
Brent for August delivery, the new front month contract, traded 82 cents or 1.32% lower at $62.86 a barrel on the London based ICE futures exchange.
An extension of nuclear talks with Iran by days, or longer, seems increasingly likely as world powers involved have signaled doubt about their ability to resolve all the issues in the next week.
He added that other OPEC members should cut production to make room for Iran’s return to its ex- production level so that Iran’s re-entry into the market wouldn’t lead to a new drop in oil prices.
If the agreement is implemented, the powers have agreed to gradually scale back sanctions imposed since 2012, including on its petroleum industry.
But high levels of global oil production and stocks continued to exert pressure on crude prices.
“Prices continue to stay within range and (we) don’t think that this range would shift until next Tuesday, the deadline for Iranian nuclear negotiations”, Phillip Futures said in a research note.
Iran has estimated it could double oil exports from about 1 million barrels a day within six months of sanctions being lifted.
Traders will be focusing on whether the United States government’s supply report due at 1430 GMT confirms the 3.2-million-barrel decline reported today by the API. A stronger greenback made the dollar-priced crude more expensive and less attractive for buyers holding other currencies.
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“Oil markets are not pricing much in terms of Greek risk but most of the European oil demand growth this year is coming from the southern countries”, said Olivier Jakob of Petromatrix in Zug, Switzerland.
