Oil Set for Weekly Loss After Strong Inventories

West Texas Intermediate headed for the third weekly decline this month amid speculation that rising U.S. gasoline stockpiles signal reduced demand in the world’s biggest oil consumer. Brent was steady in London.

Futures declined as much has 0.5 percent in New York, and were poised for a weekly loss of 1.4 percent. Gasoline inventories climbed to the highest level since March, while crude supplies dropped for a fourth week, Energy Information Administration data showed on July 23. President Barack Obama said he expects the downing of the Malaysian Air jet in Ukraine to push European nations toward tougher sanctions against Russia.

“U.S. refineries are clearly turning more crude oil into refined petroleum products at present than is actually needed,” Carsten Fritsch, an analyst at Commerzbank AG in Frankfurt, said by e-mail. “The build in gasoline inventories significantly exceeded expectations. Besides the increase in production, this was also due to weaker demand.”

WTI for September delivery fell as much as 51 cents to $101.56 a barrel in electronic trading on the New York Mercantile Exchange, and traded for $101.66 at 1:11 p.m. London time. The contract slid $1.05 to $102.07 yesterday, the lowest close since July 16. The volume of all futures traded was 10 percent above the 100-day average for the time of day.

Brent for September settlement was 11 cents higher at $107.18 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude traded at a premium of $5.48 to WTI on ICE, compared with $5.29 at the end of last week.

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