Oil extends losses as demand fears outweigh supply concerns

By Ebru Sengul Cevrioglu

IZMIR (AA) - Oil prices decreased on Thursday over growing demand concerns after official US data showed a build-up in gasoline inventories in the world’s largest oil-consuming country.

International benchmark Brent crude was trading at $106.37 per barrel at 09.32 a.m. local time (0632 GMT) for a 0.51% decrease after the previous session closed at $106.92 a barrel.

American benchmark West Texas Intermediate (WTI) was at $99.10 per barrel at the same time for a 0.78% drop after the previous session closed at $99.88 a barrel.

Data released by the Energy Information Administration (EIA) on Wednesday showed that gasoline inventories increased by 3.5 million barrels to 228.4 million barrels, signaling low demand in the world’s largest oil-consuming country despite the peak driving season.

However, the country's commercial crude oil inventories decreased 0.1% during the week ending July 15, falling by around 400,000 barrels to 426.6 million barrels, against the market expectation of a rise of 300,000 barrels.

Strategic petroleum reserves, which are not included in commercial crude stocks, also declined by 5 million barrels to 480.1 million barrels last week, the data revealed.

On the supply side, worries over Libyan cuts eased as the country's National Oil Corporation announced Wednesday that preparations are underway to export crude oil after the lifting of force majeure on terminals and oil fields.

"On July 20, a tanker is scheduled to arrive at the terminal of Zueitina to load one million barrels of Abutifal crude, and a tanker will arrive at Sedra terminal scheduled during the period from July 19 to 20. In addition, two tankers will arrive at Ras Lanuf terminal on 20/21 on July," the statement read.

It also noted that a tanker is scheduled to load 600,000 barrels of Brega crude during this period. "These arrangements have been made in order to resume production’s operations," the company stressed.

Meanwhile, repair work is continuing following third-party damage to the power supply to a facility on the Keystone pipeline, according to Canada's TC Energy Corporation. The pipeline has been working at a reduced rate as a result of the incident since July 17.

"Our system continues to operate safely at a reduced rate as a result of the incident. We are unable to further discuss operations as it involves commercially sensitive information. We can confirm there was no material impact to TC Energy-owned facilities during the incident. Currently, there is no timeline for completion of repairs and restoration of power service," the company said.