Crude oil drops to three-month low

LONDON: Oil fell to a threemonth low in New York as supplies were considered plentiful even as stockpiles were seen deepening a record pullback in the United States, the biggest fuel consumer.

West Texas Intermediate futures declined 1.3 per cent after falling 2.4 per cent on Monday. While US crude inventories probably slid by 2.25 million barrels last week, gasoline supplies may have added 600,000 barrels, swelling stockpiles already at their highest in decades, according to a survey before a government report on Wednesday.

Crude has slipped more than 15 per cent since early June after almost doubling from a 12-year low in February as supply disruptions from Nigeria to Canada trimmed a worldwide surplus. BP, the first oil major to report second-quarter results, missed analyst estimates as lower prices continued to erode income and refining margins shrank.

“We still have a little bit of downside room left,” Andy Sommer, an analyst at Axpo Trading in Dietikon, Switzerland, said by phone. While “we are pretty balanced in that $40 to $55 range,” there “could be bearish surprises on the supply side in the coming months.”

US stockpiles

West Texas Intermediate for September delivery dropped as much as 71 cents to $42.42 a barrel on the New York Mercantile Exchange, the lowest since April 20, and traded for $42.56. The contract lost $1.06 to $43.13 on Monday. Total volume traded Tuesday was in line with the 100day average.

Brent for September settlement fell 42 cents, or 0.9 per cent, to $44.30 a barrel on the Londonbased ICE Futures Europe exchange, trading at a premium of $1.74 to WTI. The global benchmark crude fell 2.1 percent to $44.72 on Monday.