West Texas Intermediate fell for a 10th day, the longest losing streak on record, after government data showed U.S. gasoline stockpiles expanded amid reduced demand in the world’s biggest oil user. Brent dropped in London.

Futures declined as much as 0.6 percent in New York. Gasoline inventories increased by 579,000 barrels last week as a measure of consumption slid, the Energy Information Administration reported. Brent closed at a two-month low yesterday amid signs that Libya, the holder of Africa’s largest crude reserves, will boost exports, while Iraqi production remains unaffected by an insurgency.

“It’s drive time but we’re not really seeing a gain in consumption,” said Jonathan Barratt, the chief investment officer at Ayers Alliance Securities in Sydney who predicts investors may buy WTI contracts if prices fall to about $100 a barrel. “That might be the nail in the coffin for prices. The geopolitical picture isn’t as volatile as it once was.”

WTI for August delivery dropped as much as 57 cents to $101.72 a barrel in electronic trading on the New York Mercantile Exchange and was at $101.80 at 4:05 p.m. Sydney time. The contract slid $1.11 to $102.29 yesterday, the lowest close since May 16. The volume of all futures traded was about 3 percent above the 100-day average. The 10-day decline is the longest stretch since futures started trading in March 1983.

Brent for August settlement was down as much as 25 cents, or 0.2 percent, at $108.03 on the London-based ICE Futures Europe exchange. The European benchmark crude traded at a premium of $6.38 to WTI. The spread widened for the first time in four days yesterday to close at $5.99.

Fuel Demand

U.S. gasoline stockpiles rose to 214.3 million barrels in the week ended July 4, the EIA, the Energy Department’s statistical arm, said yesterday. Supplies were forecast to decrease by 400,000 barrels, according to the median estimate in the Bloomberg survey of nine analysts.

Consumption of the motor fuel shrank by 233,000 barrels a day to 8.94 million, the report shows. The peak U.S. driving season typically starts on Memorial Day, which was May 26 this year, and runs through Labor Day on Sept. 1.

Crude inventories at Cushing, Oklahoma, the delivery point for WTI and the biggest U.S. oil-storage hub, climbed by 447,000 barrels to 20.9 million. Supplies nationwide dropped by 2.4 million barrels to 382.6 million.

Libyan Exports

Libya, which has regained control of oil terminals seized by rebels, plans to increase shipments gradually to avoid disrupting the market, Samir Kamal, the nation’s governor to OPEC, said yesterday. The country has become the smallest producer in the Organization of Petroleum Exporting Countries because of unrest in the past year.

A pipeline from the Sharara field restarted on July 8. That allows the deposit, which can produce 340,000 barrels a day of crude, to resume, according to state-run National Oil Corp. Libya pumped 300,000 barrels a day last month, data compiled by Bloomberg show.

In Iraq, the second-largest OPEC member, fighting remains concentrated in the north, where militants from a breakaway al-Qaeda group known as the Islamic State captured the city of Mosul last month. The conflict hasn’t spread to the south, the source of more than three-quarters of its crude output.

Oil’s decline may end as a technical indicator shows further losses probably won’t be sustainable. The 14-day relative strength index for both WTI and Brent have slid to almost 30, a level below which investors typically consider a market to be oversold, data compiled by Bloomberg show.

 

Source: Bloomberg

 

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