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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