Oil Extends Losses After Smaller Drawdown in Crude Inventories

Aug 08, 2018

West Texas Intermediate oil extended losses in North American trade on Wednesday, as data showed that oil supplies in the U.S. fell less than expected.

Crude oil for September delivery on the New York Mercantile Exchange fell 1.45 cents, or 2.10%, to trade at $67.72 a barrel by 10:43 AM ET (2:43 GMT), compared to $67.83 ahead of the report.

The U.S. Energy Information Administration said in its weekly report that crude oil inventories fell by 1.351 million barrels in the week ended Aug. 3. Market analysts had expected a crude-stock decline of 2.8 million barrels, while the American Petroleum Institute late Tuesday reported a decline of 6 million.

Supplies at Cushing, Oklahoma, the key delivery point for Nymex crude, decreased by 590,000 barrels last week, the EIA said.

Total U.S. crude oil inventories stood at 407.4 million barrels as of last week, according to a press release, which the EIA said was “1% below the five year average for this time of year.”

The report also showed that gasoline inventories increased by 2.900 million barrels, compared to expectations for a decrease of 1.700 million barrels, while distillate stockpiles rose by 1.230 million barrels, compared to forecasts for a rise of 220,000.

Meanwhile prices of oil were held down by news that China will impose a 25% retaliatory tariff on $16 billion worth of U.S. goods, including crude. Trade tensions continued this week after the U.S. announced a 25% tariff on $16 billion of Chinese goods to go into effect on Aug. 23.

Elsewhere, on the ICE Futures Exchange in London, Brent oil fell 1.94% to $74.20 while gasoline futures decreased 2.15% to $2.0475 a gallon, while Heating Oil lost 1.56% to $2.1361 a gallon.