NEW YORK – July 01, 2015 –Oil prices slipped Wednesday after an industry group said that U.S. crude supplies unexpectedly rose last week.
Traders are waiting on inventory data from the U.S. government, which is due at 10:30 a.m. EDT. Market participants surveyed by The Wall Street Journal said they expect the report to show that stockpiles fell for a ninth straight week, which would be the longest streak of declines on record. But the American Petroleum Institute, an industry group, reported Tuesday that its own data showed a 1.9-million-barrel supply build.
Light, sweet crude for August delivery recently fell $1.14, or 1.9%, to $58.33 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, fell 75 cents, or 1.2%, to $62.84 a barrel on ICE Futures Europe.
U.S. oil supplies have shrunk in recent weeks since hitting a record high in April as refineries have processed more crude into gasoline and other fuels. The inventory drops have helped boost U.S. oil prices by 25% in the second quarter. But expectations that last year’s drop in crude prices would lead to a slowing of robust U.S. production have so far not shown up in government data, one of the reasons that prices have been capped around $60 a barrel.
The U.S. Energy Information Administration said Tuesday that U.S. oil output in April rose to 9.7 million barrels a day, the highest level since 1971.
Members of the Organization of the Petroleum Exporting Countries are also widely thought to be ramping up their output.
According to estimates by consulting firm JBC Energy, OPEC production increased by 170,000 barrels a day in June to 31.2 million barrels a day, the highest level since September 2012. The group will release its own production data later this month.
“It would appear that supply is poised to exceed strong global demand by a sizable margin during this new third quarter,” said Jim Ritterbusch, president of energy-advisory firm Ritterbusch Associates, in a note.
Meanwhile, Iran and the West extended talks over Tehran’s nuclear program for a week past Tuesday’s deadline. A deal, if reached, could eventually allow more Iranian crude onto the already-oversupplied global market.
Gasoline futures recently fell 1.7% to $2.0152 a gallon. Diesel futures fell 1.2% to $1.8666 a gallon.