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London - Oil traded near a two-month low in New York as total US inventories climbed to a record, signalling the surplus will be slow to clear.
West Texas Intermediate for September delivery dropped 0.6%. While an Energy Information Administration report on Wednesday showed that crude inventories fell by 2.34 million barrels last week to 519.5 million, combined supplies of crude and refined fuels reached a record 1.385 billion barrels amid increased gasoline stocks.
Oil has fluctuated between about $44 and $52 a barrel since early June, after almost doubling from a 12-year low in February as supply disruptions and falling US output trimmed a global surplus.
Saudi Arabian Oil Company, the world’s biggest oil producer also known as Aramco, is maintaining drilling activities and its sales to buyers in East Asia are rising, chief executive officer Amin Nasser told reporters Wednesday.
"The narrative of a balanced oil market in the second half of 2016 has so far not proved to be correct, as US oil - crude and products - inventories have risen to a new record," Giovanni Staunovo, an analyst at UBS Group AG in Zurich, said in a report.
"Absent new large supply disruptions, the near-term path for oil prices should remain lower."
WTI for September delivery slipped 28 cents to $45.47 a barrel on the New York Mercantile Exchange at 1:08 p.m. London time.
The August contract expired on Wednesday 29 cents higher at $44.94, after earlier falling to a two-month intraday low of $43.69. Total volume traded was about 37% below the 100-day average.
US output
Brent for September settlement dropped 31 cents to $46.86 a barrel on the London-based ICE Futures Europe exchange. Prices rose 1.1% to $47.17 on Wednesday. The global benchmark traded at a premium of $1.34 to WTI.
US crude output increased by 9 000 barrels a day to 8.49 million a day, the EIA reported on Wednesday. Gasoline stockpiles rose for the fourth time in five weeks to 241 million barrels as refinery utilization climbed to 93.2% of capacity. Cushing inventories expanded.
Oil-market news:
Aramco is still working on plans for an initial public offering and is studying whether to list shares on an overseas stock exchange as well as in Saudi Arabia, Nasser told reporters on Wednesday.
Saudi Arabia overtook Russia as the biggest provider of oil to China in June, according to data from the General Administration of Customs.
