21 July 2016, London — Oil prices slipped on Thursday after a rise in U.S. gasoline inventories helped push U.S. oil stocks to a record high, reinforcing worries of a global oversupply.
U.S. crude and oil product stocks rose 2.62 million barrels in the week to July 15 to an all-time high of 2.08 billion barrels, the U.S. Energy Department said.
U.S. gasoline stocks USOILG=ECI rose 911,000 barrels in the week, against a forecast for unchanged, and were well above the upper limit of the average range, data from the U.S. Energy Information Administration showed.
Tamas Varga, an oil analyst at London brokerage PVM Oil Associates, said the build in U.S. oil inventories reflected a very well-supplied global market.
“There is lots of oil around,” said Varga. “Market strength is not sustainable.”
U.S. light sweet crude for September delivery CLc1, the new front-month contract from Thursday, was down 20 cents at $45.55 a barrel by 1350 GMT. The August contract expired on Wednesday after rising 29 cents, or 0.7 percent, to settle at $44.94 a barrel.
Brent crude LCOc1 was down 15 cents at $47.02 a barrel.
U.S. crude oil stocks USOILC=ECI fell for a ninth consecutive week last week, dropping 2.3 million barrels.
But at 519.5 million barrels, crude oil inventories are at historically high levels for this time of year, the EIA said.
ABN AMRO senior energy economist Hans van Cleef said investors were concerned by the global oversupply and high inventories:
“Near-term there are still some downside risks,” van Cleef said, forecasting Brent could slip around $5 lower towards $42 or $43 a barrel.
July is the peak of summer when Americans traditionally take to the road, driving up gasoline demand.
A glut of refined products has worsened an already grim outlook for U.S. crude oil for the rest of the year and the first half of 2017, traders warned this week, as the spread between near-term and future delivery prices reached its widest in five months.
*Christopher Johnson; Aaron Sheldrick; Editing – Dale Hudson – Reuters.