Oil hits six-and-a-half year low as United States crude sup­plies rise

The China Post - - BUSINESS INDEX & -

Oil prices in New York sagged to a new six-and-a-half year low Wed­nes­day fol­low­ing data show­ing an in­crease in U.S. petroleum stocks.

U.S. bench­mark West Texas In­ter­me­di­ate for de­liv­ery in Septem­ber dropped US$1.82 to US$40.80 a bar­rel on the New York Mer­can­tile Ex­change. The con­tract fell as low as US$40.46 a bar­rel ear­lier in the ses­sion.

Euro­pean bench­mark Brent

oil for Oc­to­ber de­liv­ery fell US$1.65 to US$47.16 a bar­rel in Lon­don.

The drop came af­ter a U.S. Depart­ment of Energy re­port showed oil stocks rose 2.6 mil­lion bar­rels in the week end­ing Aug. 14. The data also showed a 300,000 bar­rel rise at the closely watched Cush­ing, Ok­la­homa trad­ing hub.

Traders are gird­ing for fur­ther weak­ness with the end of sum­mer driv­ing sea­son.

Bear­ish fac­tors in­clude the Iran nu­clear deal with ma­jor pow­ers; slow­ing de­mand in China; and con­tin­ued high out­put in Saudi Ara­bia and some other OPEC coun­tries.

“We’re prob­a­bly likely for some fur­ther weak­ness,” said Fred Lawrence, vice pres­i­dent of eco­nom­ics and in­ter­na­tional af­fairs at the In­de­pen­dent Petroleum As­so­ci­a­tion of Amer­ica.

“I don’t nec­es­sar­ily ex­pect it to go be­low US$40 for a long pe­riod of time, but it cer­tainly is poised to do that.”

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