Crude prices dipped again yesterday as the bears found plenty of support for an extended slide. Oil fell 0.7 per cent, or 55 US cents, to $75.22 a barrel, in midday trading in the US after an industry report signalled petroleum inventories there were headed for a record, following an unexpected sharp increase in crude stocks last week.
Prices are now centred near the mid-point of this year's $64.24 to $87.15 trading range, as recovering energy demand has been insufficient to drain ample supplies. That has led to an unseasonal seven consecutive weeks of gains in US petrol stockpiles and 11 in distillate inventories, including diesel. "It looks like the oil product market is very comfortably supplied and that demand conditions remain lacklustre," said Stefan Graber, a commodities analyst with Credit Suisse in Singapore.
"It will probably take a few weeks until we see decisive improvements." Murban crude for October loading, produced by Abu Dhabi National Oil Company, fell 7 cents to a discount of 12 cents a barrel to its official price. The American Petroleum Institute (API) late on Tuesday said US crude stockpiles rose by almost 5.9 million barrels last week, compared with analysts' expectations for a 1 million barrel drop. Petrol stocks rose 2 million barrels, the API said, compared with forecasts for a 100,000 barrel decline. Supplies of petrol normally fall over the summer as consumption peaks in the northern hemisphere.
Last week's US Energy Information Administration data showed combined crude and product stockpiles at 1.125 billion barrels - 3.5 million higher than at the same time last year and 2.1 million below the record high set back in 1990, when the US government started publishing the data. Oil prices have mostly hovered about the OPEC desired range of $70 to $80 a barrel this year, after the group relaxed compliance with 2008 production cuts.
But the crude market has been rattled by the influence of currency and stock market fluctuations on an intraday basis as investors reduced or increased risk exposure, especially at the height of Europe's sovereign debt crisis in May, when prices reached both the highs and the lows for the year. business@thenational.ae