Oil tumbles 5% after US weekly stockpile data disappoint

Stocks had a split session a day ahead of the monthly jobs report. Oil fell dragging down energy shares.
The Kern River Oil Field near Bakersfield, California, is shown in this June 2015 file photo.
The Kern River Oil Field near Bakersfield, California, is shown in this June 2015 file photo.PHOTO: AFP

NEW YORK (REUTERS) - Oil prices fell 5 per cent to two-month lows on Thursday (July 7) after the US government reported a weekly crude draw within analysts' forecasts, disappointing market bulls who had expected larger declines.

Brent crude futures were down US$2.36, or 4.8 per cent, at US$46.44 per barrel by 1710 GMT. The session low was US$46.27, the lowest for Brent since May 11.

US crude futures were down US$2.23, or 4.7 per cent, to US$47.20. It earlier hit a two-month low at US$44.87.

The Energy Information Administration (EIA) said crude stockpiles fell 2.2 million barrels for the week ended July 1, drawing for a seventh week in a row.

But the EIA's figure came in just below the decline of 2.3 million barrels forecast by analysts in a Reuters poll but far less than the 6.7 million-barrel draw reported by trade group the American Petroleum Institute late Wednesday.

"Expectations were high for this report, and they were dashed," said John Kilduff, partner at New York energy hedge fund Again Capital.