Oil traded lower on Tuesday as analysts forecast a gain in Crude Oil Inventories ahead of the American Petroleum Institutes report, scheduled for today. API collects information on a voluntary basis from operators of refineries, pipelines and bulk terminals. The Energy Information Administrations more reliable report is due tomorrow at 14:30 GMT.
On the New York Mercantile Exchange, WTI crude for July delivery slipped 0.06% on the day at 6:16 GMT and stood at $95,72 a barrel. Prices ranged between days high of $95.90 and low at $95.63 per barrel. Brent oil also marked a loss and traded at $103.63 at 6:18 GMT, down 0.08% on the day. The European benchmark varied between days low at $103.57 and high at $103.85.
According to a Reuters pole of five analysts, U.S. crude oil stockpiles are expected to have risen last week on higher imports. A separate survey, conducted by Bloomberg News, says crude reserves probably have gained 550 000 barrels last week. Gasoline stockpiles are projected to have surged also by 500 000 barrels and distillate inventories might have added 900 000 barrels.
Ric Spooner, a chief market analyst at CMC Markets in Sydney said for Bloomberg: “We saw the driving season starting to have an impact last week. The market will be looking for that to be continued: a scenario where refinery utilization remains pretty high and inventory levels decline overall.” He predicted WTI prices might reach $97 a barrel.
Prices are likely to be held down by Chinas economy slowdown and increasing global oil supply. Chinese exports jumped by only 1% in May and shipments to the U.S. and European Union, the Asian nation’s two biggest export targets, declined for a third straight month. China’s imports were projected to gain 6% but official figures strayed well below and showed a 0.3% decrease, marking a ten-month low.
Consumer inflation shrank to 2.1%, mismatching a 2.9% forecast and Producer Price Index (PPI) tumbled 2.9%, above expectations of a 2.5% decrease. The M2 money supply jumped 15.8%, missing 15.9% expectation. Retail Sales met projections of a 12.9% gain and so did Industrial Production with a 9.2% increase on an annual basis.
Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts said for Bloomberg yesterday: “The Chinese economic news is bearish. With the run-up we had, people are just feeling that maybe it’s a little too much given the economic situation especially in China.”
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