Crude Falls As Higher Stockpiles Weigh

Crude oil snapped a two-day rising streak after a report showed gasoline stockpiles increased in the US, the world’s biggest oil consumer, confirming that demand on fuel may be dropping as the summer driving season is near its end.

The American Petroleum Institute showed yesterday that gasoline inventories climbed by 1.7 million barrels while distillate supplies gained 1.1 million. Meanwhile, crude inventories shrank by 999,000 barrels in the week ended August 9.

Markets now await the Energy Information Administration report later in the day to confirm yesterday’s numbers. Crude stockpiles probably decreased by 1.5 million barrels while gasoline supplies probably fell by 1.6 million and distillates increased by 1 million.

- Crude is trading around $106.51 a barrel after falling $0.32

- Brent is trading around $109.43 a barrel after falling $0.35

Volatility however may persist in the next few weeks, as the strong US data may determine the Federal Reserve to start curbing its stimulus, probably staring next month, according to Atlanta Fed President Dennis Lockhart.

Data showed yesterday that US retail sales rose in July, pointing to an acceleration in consumer spending, while on Thursday data may show that inflation advanced further in July and on Friday the consumer confidence is expected to have improved in August.

However, concerns over supply disruptions in OPEC members Libya and Iraq support prices. Libya’s Mellitah port may restart today yet state National Oil Corp. said in a statement that it could not provide September loading schedules because of the unsettled labor issue.

- Natural gas is trading at $3.291 per cubic feet after rising 0.18%

- Gasoline is trading at $2.9333 per cubic feet after falling 0.31%

- Heating oil (diesel) is trading at $3.0404 a gallon after falling 0.22%