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Oil Drops After Gasoline Supplies Rise

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West Texas Intermediate crude declined with losses in gasoline as U.S. inventories of the fuel expanded for a third week, threatening to depress refining margins. Brent also fell.

Gasoline stockpiles grew by 3.38 million barrels last week and supplies around New York Harbor, where futures contracts are delivered, were at the highest seasonal level since 2008, Energy Information Administration data show. WTI briefly pared losses after the number of Americans filing for unemployment benefits dropped to an eight-year low, then fell further.

“The increase in gasoline and distillate inventories and the fall in demand is weighing on the entire complex,” said John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund that focuses on energy. “We didn’t rise off the surprisingly strong weekly jobs report this morning, which shows the inherent weakness of the market.”

WTI for September delivery slipped 82 cents, or 0.8 percent, to $102.30 a barrel at 12:30 p.m. on the New York Mercantile Exchange. The volume of all futures traded was 19 percent below the 100-day average for the time of day.

Brent for September settlement declined 82 cents, or 0.8 percent, lower at $107.21 a barrel on the London-based ICE Futures Europe exchange. Volume was 23 percent below the 100-day average. The European benchmark crude traded at a premium of $4.91 a barrel to WTI on ICE, unchanged from yesterday.

via Bloomberg

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza

@alfonso_forex

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