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Oil sinks to fresh 1-month low as glut worries weigh

Published 08/06/2017, 12:31
Updated 08/06/2017, 12:35
© Reuters.  Oil sinks to fresh 1-month lows
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Investing.com - Oil prices gave up modest overnight gains in North American trading on Thursday, falling to a fresh one-month low in the wake of data showing a surprise build in U.S. crude stockpiles.

The U.S. West Texas Intermediate crude July contract was at $45.52 a barrel by 7:35AM ET (1135GMT), down 21 cents, or around 0.5%, after hitting its lowest since May 5 at $45.34.

Elsewhere, Brent oil for August delivery on the ICE Futures Exchange in London dipped 22 cents to $47.84 a barrel. The global benchmark touched $47.65 earlier in session, a level not seen since May 5.

Oil prices plunged on Wednesday after data showed that U.S. crude stockpiles unexpectedly climbed for the first time in nine weeks.

The U.S. Energy Information Administration said in its weekly report that crude oil inventories rose by 3.3 million barrels in the week ended June 2, disappointing expectations for a crude-stock decline of 3.4 million barrels.

The report also showed that gasoline inventories increased by 3.3 million barrels. For distillate inventories including diesel, the EIA reported a rise of 4.4 million barrels.

Meanwhile, investors continued to weigh the impact of diplomatic tensions between Qatar and other Middle Eastern nations, including Saudi Arabia, on an OPEC-led push to tighten the market.

With oil production of about 620,000 barrels per day, Qatar's crude output ranks as one of the smallest among OPEC producers, but tension within the cartel could weaken an agreement to hold back production in order to prop up prices.

Last month, OPEC and some non-OPEC producers extended a deal to cut 1.8 million barrels per day in supply until March 2018.

Concerns that the ongoing rebound in U.S. shale production could derail efforts by other major producers to rebalance global oil supply and demand remained in focus.

Elsewhere on Nymex, gasoline futures for July inched down 0.3 cents, or about 0.2%, to $1.498 a gallon, while July heating oil added 0.2 cents to $1.419 a gallon.

Natural gas futures for July delivery tacked on 1.2 cents to $3.032 per million British thermal units, as traders looked ahead to weekly storage data due later in the global day.

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