Oil Continues Downward After Low Stockpiles

West Texas Intermediate fell for a second day after inventories of gasoline and distillate fuels increased in the U.S., the world’s biggest oil consumer. Brent slipped as the European Central Bank cut its deposit rate below zero.

Futures dropped as much as 0.5 percent in New York. Gasoline stockpiles increased by 210,000 barrels to 211.8 million in the seven days ended May 30, while distillate inventories, including heating oil and diesel, climbed by 2.01 million barrels to 118.1 million, the Energy Information Administration reported yesterday. The ECB said it would implement further measures as policy makers try to counter the prospect of deflation.

“An overall bearish picture resulted from total hydrocarbon stocks increasing,” Harry Tchilinguirian, head of commodity markets strategy at BNP Paribas SA in London, said in a report. “The door is still open for a short-term correction in prompt WTI, possibly below $100.”

WTI for July delivery declined as much as 52 cents to $102.12 a barrel in electronic trading on the New York Mercantile Exchange and was at $102.27 at 1:11 p.m. London time. The volume of all futures traded was 34 percent below the 100-day average for the time of day. Prices are up 3.9 percent this year.

Brent for July settlement decreased as much as 54 cents, or 0.5 percent, to $107.86 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude traded at a premium of $5.68 to WTI on ICE. The spread closed at $5.76 yesterday, the narrowest since April 15.

via Bloomberg

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