Brent oil, the global benchmark, entered a bear market on Tuesday, joining West Texas Intermediate (WTI). Hedge funds slashed their favorable bets on USA crude to a five-month low during the week to July 26, while holding a record internet short, or bearish position, on gas, data showed on Friday.
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Troy Vincent, analyst at New York-based oil cargo tracker ClipperData, said while last week’s gasoline draw was a relief, the rise in crude stocks despite a near 1 per cent growth in refinery utilization was a “bigger concern”. At the time of writing, * a href=”http://oilprice.com/commodity-price-charts?1&page=chart&sym=CL*1″ rel=”nofollow noopener noreferrer” target=”_blank” *WTI was at US$39.51. “I also wonder if the market is going to chop around a bit first, like it did in late May to June before dropping after many threw in the towel”.
Gasoline stocks slumped by 3.3 million barrels, versus forecasts for a 200,000-barrel drop.
A supply glut, weak demand and expectations of increasing production have sent prices tumbling since June.
US crude oil refinery inputs averaged about 16.9 million barrels per day during the week of July 29, up 266,000 barrels per day from the previous week’s average.
Crude oil prices continued to fall precipitously on Monday, with the West Texas Intermediate (WTI) benchmark for United States crude dropping below $40 per barrel for the first time in more than three months.
Crude oil (WTI) was up 3.32% to $40.82 per barrel and Brent crude was climbing 2.82% to $42.98 per barrel.
The American Petroleum Institute (API), an industry trade group, said yesterday that US crude oil inventories fell by 1.3 million barrels in the week ended July 30. Industry leader ExxonMobil (XOM – Analyst Report) just released its second-quarter earnings results last week, and both earnings and revenue came in below our consensus estimates.
Oil on Tuesday fell below $40 a barrel in NY for the first time since mid-April, and traders are faced with the reality that the worldwide glut of petroleum has merely changed from an oversupply of crude into one of refined products. The rally fizzled out, however, even after industry data showed a decline in USA crude oil supplies.
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A weaker greenback also prompted buying in dollar-priced oil, which becomes cheaper to holders of other currencies when the dollar falls.
