Mubasher: Oil prices declined on Thursday, as official figures showing a sharp build in US inventories of products such as gasoline last week indicated weak demand during the typical driving season, Reuters said.
By 7:28 am GMT, global benchmark Brent futures declined by 0.1% to $56.63 per barrel (pb), after falling by 1.1% on Wednesday, while US Nymex crude futures fell by around 0.3% to $63.59 pb, having dropped by 1.5% in the prior session.
Although the Energy Information Administration’s (EIA) data showed a larger-than-expected fall in US oil inventories last week, market focus diverted to large increases in refined product stockpiles.
Gasoline inventories rose by 3.6 million barrels, while distillate stockpiles surged by 5.7 million barrels, the EIA reported on Wednesday.
“Gasoline consumption is painfully weak given US consumers are in peak driving season,” Vanguard Markets managing partner Stephen Innes was quoted by Reuters.
Oil futures have seen a decline this week as jitters over the situation Middle East retreated.
Market participants shrugged off another crude tanker incident in the Middle East amid heightened tensions between the US and Iran.
Washington said it was unclear whether an oil carrier towed into Iranian waters was captured by Iran or rescued as claimed by Tehran.
Moreover, crude production in the Gulf of Mexico resumed after it was disrupted last week by a Hurricane Barry, which came ashore on Saturday in central Louisiana.
More than half of daily crude output in the Gulf remained offline by Tuesday, as most producers were re-staffing platforms to resume operations.
Fears also emerged over Chinese economic growth, with Japanese exports dropping for the seventh month in a row.
Japanese shipments to China plunged by more than 10%, while sentiment among manufacturers in the world’s third biggest economy hit a three-year trough.
“Easing of tensions between the US and Iran, mixed Chinese growth data and storm-hit operations getting back online are all pressuring oil prices downward,” OANDA senior market analyst Alfonso Esparza was quoted by the news agency.
