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