10 July 2014, News Wires – Brent crude edged down towards $108 a barrel on Thursday, extending its longest losing streak in four years, as weak gasoline demand in the US offset a rise in crude imports in China.
Investors were disappointed with a rise in US gasoline inventories last week despite being deep into the peak summer driving season.
Brent crude had fallen 14 cents to $108.14 a barrel early on Thursday, down for a ninth straight session and matching a similar losing run in May 2010.
US crude is down for a tenth consecutive session at $101.81 a barrel, 48 cents below Wednesday’s close. The front-month price is on track to post its longest stretch of losses since July 1984.
A steeper fall in West Texas Intermediate has widened its spread with Brent to more than $6 a barrel after touching the narrowest in nearly a month on Wednesday.
Concerns over supply disruptions in Iraq have eased as exports from southern Basra continued amid an Islamic insurgency. Libya has restarted an oilfield which will double its production.
“The geopolitical premium on oil has been taken out. We can expect oil prices to be stable. For now, it’s just noise,” Gordon Kwan, head of Asia oil and gas research at Nomura said.
“From China, it is quite reassuring. Oil imports went up by 10% in the first half and this is supportive to the economy.”
Hong Kong-based Kwan expects Brent to trade between $105 and $115 in the second half of the year.
China, the world’s second-largest oil consumer, posted a 10.2% rise in crude imports in the first six months this year, customs data showed on Thursday. Investors expect Beijing to implement more stimulus measures to support growth which could lift its fuel demand.
But fuel demand in the United States has been a letdown despite a gradual recovery at the world’s largest economy.
“We expect gasoline demand to pick up, but so far, it has not surpassed late May or early June levels,” Societe Generale’s Michael Wittner said in a note.
Gasoline demand over the past four weeks was at 9.04 million barrels per day, down 0.4% versus the same period last year, data from the Energy Information Administration showed on Wednesday.
Stockpiles of the motor fuel rose 579,000 barrels, compared with analysts’ expectations in a Reuters poll for a 217,000-barrel drop. Crude inventories fell 2.4 million barrels in the week to 4 July, slightly more than analysts’ expectations for a decrease of 2.2 million barrels.