July Nymex WTI prices are trading in negative territory Thursday, extending their losses from yesterday’s sharp declines. Risk aversion has now sent oil prices to 7 month lows, with WTI falling 3.2% yesterday to close a huge $2.94 lower at $87.82 a barrel. Weak oil demand in the U.S., strong output from Middle East producers such as Saudi Arabia and Libya, and easing tensions between Western powers and Iran have all contributed to the recent sharp decline in oil as well as increasing concerns surrounding contagion within the eurozone, which has resulted in wave after wave of risk aversion leading to extreme selling pressure on WTI prices. In terms of supply, U.S. crude inventories fell by 353,000 barrels last week, according to the American Petroleum Institute’s (API) weekly report, against expectations that stocks had risen. Gasoline stocks rose 2.1mln barrels and distillate stocks fell 1.3mln barrels, the API said. Gasoline stocks had previously been expected to be down 800,000 barrels and distillate stocks were seen down 100,000 barrels. July WTI is currently trading $87.67, down 15 cents.
EasyForexNews Research Team