Oil slips towards $45 as US output increases

Longest rally this year falters as Russia signals opposition to further Opec cuts

US oil output last week increased by the most since January. Photograph: iStock

US oil output last week increased by the most since January. Photograph: iStock

 

Oil slipped toward $45 a barrel as investors weighed expanding US production against declining crude and gasoline stockpiles.

Futures dropped as much as 1 per cent in New York, erasing Thursday’s 0.9 per cent gain. US oil output last week increased by the most since January.

Crude inventories fell 6.3 million barrels, more than triple the median forecast in a Bloomberg survey before data from the Energy Information Administration. Gasoline stockpiles decreased for a third week.

Oil’s longest rally this year faltered this week after Russia was said to oppose any proposal for deeper production cuts by the Organisation of Petroleum Exporting Countries (Opec) and its partners.

Crude in New York and London remains in a bear market amid concern rising global output will offset the Opec-led curbs.

West Texas Intermediate for August delivery lost as much as 44 cents to $45.08 a barrel on the New York Mercantile Exchange and was at $45.12 as of 7:51am in Hong Kong.

Total volume traded was about 52 per cent below the 100-day average. The contract gained 39 cents to $45.52 on Thursday, rebounding from the biggest daily loss in four weeks.

Brent for September settlement added 32 cents, or 0.7 per cent, to $48.11 a barrel on the London-based ICE Futures Europe exchange on Thursday. The global benchmark ended the session at a premium of $2.41 to September WTI.

– (Bloomberg )