“The battles in Libya and the rebellion in Iraq haven’t had an impact on oil shipments,” said John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund that focuses on energy. “This is the status quo these days. There’s also lackluster demand, which is adding to the downward pressure.”
WTI for September delivery dropped 42 cents, or 0.4 percent, to settle at $101.67 a barrel on the New York Mercantile Exchange. It was the lowest settlement since July 16. The volume of all futures traded was 16 percent below the 100-day average for the time of day.
Brent for September settlement dropped 82 cents, or 0.8 percent, to end the session at $107.57 a barrel on the London-based ICE Futures Europe exchange. Volume was 38 percent lower than the 100-day average. The European benchmark crude closed at a $5.90 premium to WTI, down from $6.30 on July 25. Iraq, Libya
Attackers fired at a U.K. diplomatic convoy in Libya a day after the U.S. State Department evacuated its embassy. Libya pumped 500,000 barrels of crude a day on July 24, according to the state-run National Oil Corp. The country produced 300,000 barrels a day in June, according to Bloomberg estimates. In Iraq, OPEC’s second-largest producer, fighting remains concentrated in the north, where militants from a breakaway al-Qaeda group known as the Islamic State captured the city of Mosul last month. The conflict hasn’t spread to the south, the source of more than three-quarters of the country’s oil output.
International pressure mounted on Israel to end its three-week offensive in the Hamas-controlled Gaza Strip, with President Barack Obama and the United Nations Security Council demanding an immediate truce. The conflict is the third major military showdown between the sides in less than six years. It has already claimed the lives of more than 1,000 Palestinians, 45 Israelis and a Thai worker in Israel.
Brent futures climbed on July 25 because of rising tension between Ukraine and Russia, the world’s biggest energy-exporting country. Fighting near the Malaysian Air crash site in east Ukraine again prevented Dutch and Australian investigators from reaching the area as Chancellor Angela Merkel said Europe must agree to new Russia sanctions by tomorrow.
“We’re still looking at a powder keg in Ukraine and if there’s a major escalation we’ll see the geopolitical risk premium rush back into the market,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut.
The U.S. Commerce Department is scheduled to report the nation’s gross domestic product for the second quarter on July 30, while the Labor Department will publish monthly data on non-farm payrolls on Aug. 1. The Federal Reserve is scheduled to review monetary policy at a two-day meeting starting tomorrow.
The U.S. will account for about 21 percent of global oil consumption this year, almost double that of China, estimates from the International Energy Agency in Paris show. “The fundamentals are putting a little pressure on the market,” McGillian said. “We have ample supplies and limited demand.”
Gasoline for August delivery dropped 1.61 cents, or 0.6 percent, to settle at $2.8492 a gallon on the Nymex. Diesel for August delivery declined 2.78 cents, or 1 percent, to $2.8879.
U.S. gasoline pump prices fell 0.4 cent to $3.523 a gallon yesterday, the lowest level since March 21, according to AAA, the largest U.S. motoring group.
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