Oil Falls After Over Supply Concerns Rise

Oil prices slipped on Thursday after a rise in U.S. gasoline inventories helped push U.S. oil stocks to a record high, reinforcing worries of a global oversupply.

U.S. crude and oil product stocks rose 2.62 million barrels in the week to July 15 to an all-time high of 2.08 billion barrels, the U.S. Energy Department said.

U.S. gasoline stocks USOILG=ECI rose 911,000 barrels in the week, against a forecast for unchanged, and were well above the upper limit of the average range, data from the U.S. Energy Information Administration showed. [EIA/S]

Tamas Varga, oil analyst at London brokerage PVM Oil Associates, said the build in U.S. oil inventories reflected a very well supplied global market.

“There is lots of oil around,” said Varga. “Market strength is not sustainable.”

U.S. light sweet crude for September delivery CLc1, the new front-month contract from Thursday, was down 10 cents at $45.65 a barrel by 1235 GMT. The August contract expired on Wednesday after rising 29 cents, or 0.7 percent, to settle at $44.94 a barrel.

via Reuters

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, he 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 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