Oil continues slide on inventory glut

A motorist fills her tank in France.
A motorist fills her tank in France. PHOTO: AFP

NEW YORK (AFP) - Oil futures were down again on Monday (July 25) as investor concerns about a supply glut showed no sign of letting up.

West Texas Intermediate benchmark crude for September delivery lost US$1.06 on the New York Mercantile Exchange, sinking to US$43.13, its lowest level in three months.

In London, North Sea Brent crude for September hit its lowest price since May, sinking 97 cents to US$44.72 on the Intercontinental Exchange.

 

"You really have a hangover from last week's EIA storage report," said Bob Yawger of Mizuho Securities, referring to weekly numbers released by the US Energy Information Administration.

The EIA reported last week that crude inventory had fallen by a less-than-expected 2.3 million barrels, and that gasoline supplies had risen during the US driving season, a time of peak demand.

"The gasoline numbers are so overwhelming now it's hard to pin a bullish scenario as far as storage is concerned."

Analysts say the strong dollar is also putting pressure on demand for oil futures as this effectively raises prices for holders of other currencies.