NEW YORK: Oil dropped to a three-month low under $118 a barrel yesterday as rising US crude inventories heightened concerns of a demand slowdown in the world’s top consumer.
US light crude traded down $1.69 at $117.48 a barrel by 12:41 p.m. EDT (1641 GMT) after hitting $117.11, the lowest level since early May and $30 off the record $147.27 a barrel struck on July 11. London Brent crude fell $1.03 to $116.67 a barrel. Crude oil stocks rose by 1.7 million barrels in the week to Aug. 1, according to data from the US Energy Information Administration (EIA), well above analysts’ forecasts for a 300,000-barrel build.
Stocks of distillate fuels, including heating oil and diesel, rose by 2.8 million barrels, also above forecasts, while gasoline inventories fell by a steep 4.4 million barrels against forecasts of a 1.2 million barrels drop.
“The EIA data showing big increase in crude stocks are bearish, but the gasoline numbers showing a much larger than expected draw is certainly bullish,” said Phil Flynn, analyst for Alaron Trading in Chicago. “But data also show that gasoline supply was down due to a decline in imports.”
Meanwhile, the dollar moved higher against the euro yesterday on news of a sharp fall in German industrial orders that boosted speculation the European Central Bank could become more inclined to lower interest rates. The single European currency in late-day trade was at 1.5410 dollars, down from 1.5454 late Tuesday in New York.
In London trade yesterday, the euro changed hands at 1.5410 dollars against 1.5454 late on Tuesday, 168.39 yen (167.46), 0.7906 pounds (0.7906) and 1.6327 Swiss francs (1.6294). The dollar stood at 109.19 yen (108.36) and 1.0590 Swiss francs (1.0541).
On the London Bullion Market, the price of gold slipped to $879.50 per ounce at the fixing from $882 late on Tuesday.
Europe’s main stock markets extended their rally yesterday, posting fresh gains owing to positive trading in banking and mining shares, dealers said.
US stocks traded mixed yesterday. The Dow Jones Industrial Average pared opening losses to 0.29 percent, at 11,582.30, around 1530 GMT, while the tech-heavy Nasdaq composite rebounded up 0.24 percent to 2,355.51. The broad-market Standard & Poor’s 500 index slid 0.30 percent to 1,281.00.