WTI Crude Pares Losses as Inventories Decline More Than Expected

Jul 02, 2014 10:40 am ET

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July 2 (Bloomberg) -- West Texas Intermediate crude pared losses after an Energy Information Administration report showed U.S. inventories decreased more than expected.

Supplies dropped 3.16 million barrels to 384.9 million in the week ended June 27, EIA data show. Analysts surveyed by Bloomberg expected a decline of 2.4 million. Brent crude fell as rebels in Libya said two oil ports they have held for a year are free to reopen.

WTI for August delivery fell 31 cents, or 0.3 percent, to $105.03 a barrel at 10:33 a.m. on the New York Mercantile Exchange. Volume was about 13 percent below the 100-day average.

Brent for August settlement dropped 58 cents, or 0.5 percent, to $111.71 a barrel on the London-based ICE Futures Europe exchange. It slid to $111.41, the lowest intraday level since June 12. The volume of all futures was 70 percent more than the 100-day average for the time of day. Brent traded at a premium of $6.73 to WTI on ICE, compared with $6.95 yesterday.

Supplies at Cushing, Oklahoma, the delivery point for WTI futures, decreased 1.36 million barrels to 20.5 million, the EIA said. Gasoline inventories fell 1.24 million to 213.7 million. Gasoline supplies were expected to expand by 550,000 barrels, according to the Bloomberg survey.

The ports of Es Sider and Ras Lanuf, the nation’s largest and third-largest, can ship crude again in a gesture of support for the newly elected parliament, Ali Al-Hasy, spokesman of the self-declared Executive Office of Barqa region, said today. The ports have combined capacity of 560,000 barrels a day,

The rebels are seeking self-rule for the eastern region of Libya known also as Cyrenaica. They occupied oil ports in the region at the end of July 2013, demanding an oil revenue-sharing agreement to make up for the neglect the area experienced under Muammar Qaddafi’s 42-year rule. Libya is now producing about 320,000 barrels a day, or about a fifth of its output before Qaddafi was overthrown in 2011, according to state-run National Oil Corp.

--With assistance from Grant Smith in London and Maher Chmaytelli in Dubai.