As the United States, with enough inventories, heads to the close of the summer-driving season, oil registered its lowest close in more than 2 months. In New York, Futures fell 1.3%. According to the government data, the United States gasoline and crude supplies are at the top seasonal levels in at least 2 decades. As per the American Petroleum Institute, even the high demand that the fuel had last June was not enough to make an impact in the stockpiles that closed the month at its highest since the year 1984, for this time of the year. September 5th, the Labor Day will mark the end of the summer driving season.
Since early June, the value of oil has been fluctuating between $44 and $52 a barrel. Last February actually saw the value doubling from a twelve-year low. The main reason for this could be attributed to the disruptions in supply from Canada to Nigeria. The falling United States output accounts for the reduced global surplus. The American crude stockpiles, that is still fixed at more than 100 million barrels above the 5-year average, registered a slide through July 15. This, in fact, marks a record 9th week. According to Gene McGillian, senior broker/analyst at Tradition Energy, the sentiment that made the value of the oil rise above $50, has gone. There are currently ample crude inventories and fuel stockpiles.
New York Mercantile Exchange recorded a fall of 56 cents in the September delivery of West Texas Intermediate. It settled at $44.19 a barrel, the lowest since May 9. Last week registered a 3.8% price decline. Under the 100-day average, 35% was the total volume traded. The ICE Futures Europe exchange (London-based ) registered a drop of 1.1% to $45.69 a barrel for Brent, for September. Last week saw the prices slipping about 4%. It was at a $1.50 premium to WTI that the global benchmark ended.
The dollar recorded a rise. According to the Bloomberg Dollar Spot Index, the currency registered a rise of 0.5% (compared to its major peers). To the investors, this means a reduced appeal for the dollar-denominated raw materials.
The EIA, last Wednesday reported a drop of 2.34 million barrels to 519.5 million, last week, with respect to the United States crude inventories. The 241 million barrels of stockpiled gasoline marks the highest level since the month of April. Refineries are bolstering high operating rates, in fact, the highest this year. According to Thomas Finlon, Energy Analytics Group LLC's director, the crude supplies may have registered a decline for 9 straight weeks, however, it is well ahead compared to last year's supply.