West Texas Intermediate crude traded near the lowest price in two weeks before government data that may signal the strength of fuel consumption in the U.S., the world’s biggest oil user. Brent fell in London.

Futures were little changed in New York after declining 0.7 percent yesterday amid speculation that the shutdown of a Kansas refinery will reduce crude demand. Gasoline inventories probably expanded to the highest level since March, a Bloomberg News survey shows before Energy Information Administration data today. The European Union and U.S. imposed more sanctions on Russia, the world’s largest energy exporter, to get President Vladimir Putin to back down in Ukraine.

“The EIA numbers will be watched closely,” David Lennox, a resource analyst at Fat Prophets in Sydney, said by phone. “Investors will also be watching the Russia situation for an impact on the physical logistics of the oil market, which might only happen in the future if sanctions are ratcheted up.”

WTI for September delivery was at $101.13 a barrel in electronic trading on the New York Mercantile Exchange, up 16 cents, at 3:01 p.m. Sydney time. The contract slid 70 cents to $100.97 yesterday, the lowest close since July 15. The volume of all futures traded was 8 percent above the 100-day average. Prices have lost 4 percent in July, the most in nine months.

Brent for September settlement decreased as much as 37 cents, or 0.3 percent, to $107.35 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude traded at a premium of $6.42 to WTI. The spread closed at $6.75 yesterday, the widest since July 4.

Fuel Supplies

U.S. gasoline stockpiles have risen for three weeks to 217.9 million barrels, EIA data show, bolstering speculation of slowing demand. The country’s peak summer driving season typically starts on Memorial Day, which was on May 26 this year, through to Labor Day on Sept. 1.

Supplies of the motor fuel are forecast to have expanded by 1 million barrels in the seven days ended July 25, according to the median estimate in the Bloomberg survey of 10 analysts. Supplies climbed by 60,000 barrels, the American Petroleum Institute was said to have reported yesterday.

Crude inventories probably shrank by 1.25 million barrels to 369.8 million, the survey shows. Supplies dropped by 4.4 million, according to a person familiar with the API data.

The industry group in Washington collects information on a voluntary basis from operators of refineries, bulk terminals and pipelines. The government requires that reports be filed with the EIA, the Energy Department’s statistical arm.

Refinery Fire

WTI fell the most in three days yesterday after CVR Refining LP shut its refinery in Coffeyville, Kansas, because of a fire. The plant, which has a crude-processing capacity of 115,000 barrels a day, is supplied from Cushing, Oklahoma, the delivery point for New York-traded futures.

Crude stockpiles at Cushing, the biggest U.S. oil-storage hub, slid to 18.8 million barrels in the week to July 18, the lowest since November 2008, according to the EIA. The API was said to have reported a 914,000 barrel decline through July 25.

WTI has technical support along its 200-day moving average, data compiled by Bloomberg show. Futures rebounded in mid-July after reaching this indicator, at about $99.90 a barrel today. Buy orders tend to be clustered around chart-support levels.

Russian Sanctions

EU governments agreed yesterday on their most sweeping sanctions against Russia to date, barring state-owned banks from selling shares or bonds in Europe, restricting the export of equipment to modernize the oil industry and barring the sale of equipment with military uses.

That was followed hours later by U.S. penalties against three Russian banks and a state-owned shipbuilder, adding to sanctions announced two weeks ago.

The allies were moved to act after pro-Russian separatists continued to impede an investigation into the July 17 downing of a Malaysian airliner by a surface-to-air missile over eastern Ukraine. The U.S. also says the government in Moscow continues to provide arms to the rebels and has fired artillery across the border, escalating the conflict.

 

Source: Bloomberg

 

---