Oil Drops As Inventories Rise in US

West Texas Intermediate crude fell for a second day after an industry report showed gasoline supplies expanded in the U.S., the world’s biggest oil consumer. Brent was steady in London.

Futures dropped as much as 0.6 percent in New York. Gasoline inventories increased by 3.6 million barrels last week, the American Petroleum Institute was said to have reported yesterday. Stockpiles probably rose by 1 million barrels, according to a Bloomberg News survey of analysts before government data today. Brent traded near its lowest closing price in two days amid speculation that further sanctions on Russia over the downing of a Malaysian Air jet will have no impact on energy supplies.

“Tensions related to Ukraine seem to be fading a bit, with clear signs that the separatists are willing to help, and with no new sanctions on Russia introduced,” Ole Hansen, head of commodity strategy at Saxo Bank A/S in Copenhagen, said by phone. “Attention will turn later to stockpile numbers, particularly those at Cushing, as that is what is causing WTI to be backwardated while Brent is in contango.”

WTI for September delivery declined as much as 60 cents to $101.79 a barrel in electronic trading on the New York Mercantile Exchange and was at $102.17 at 10:03 a.m. London time. The August contract expired yesterday after losing 17 cents to $104.42. The September contract is trading at a premium, or backwardation, of $1.15 a barrel to October. The volume of all futures traded was about 24 percent below the 100-day average for the time of day. Front-month prices have climbed 3.8 percent this year.

via Bloomberg

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