Oil prices dropped on Thursday, extending their retreat from the previous session, while base metals sector were mixed and gold retained its hold above the $950 an ounce level.
Nymex September West Texas Intermediate fell 45 cents to $64.95 a barrel while ICE September Brent lost 31 cents at $66.90 a barrel.
WTI has been trading at a discount to Brent for much of July, reflecting weak US demand conditions, which were a feature again in US inventories data, released on Wednesday.
Eugen Weinberg at Commerzbank noted that declining crude oil consumption was not limited to the US economy.
“Crude oil imports in Japan, the third largest oil consumer worldwide, plummeted by 19 per cent year-on-year in June to the lowest level in 18 years,” said Mr Weinberg: “To date, only China has seen a noticeable recovery in oil demand. This underlines our sceptical view on the current level of oil prices.”
US inventories data, released on Wednesday showed crude stocks fell 1.8m barrels last week, below the consensus forecast for a decline of 2.1m barrels. Much of the decline was due to a fall in imports as refineries’ demand for crude remained subdued, due to weak profit margins and poor demand from end users. Refinery utilisation fell 2.1 percentage points to 85.8 per cent, a bigger-than-expected drop.
Petrol stocks rose 800,000 barrels, matching the consensus market forecast. Petrol demand averaged 9.18m b/d over the past four weeks, up just 0.7 per cent compared with the same period a year ago.
On Thursday, Nymex August RBOB unleaded gasoline traded marginally higher at $1.8413 a gallon after rising 1.4 per cent in the previous session.
Distillate stocks (including heating oil) which already stood at their highest levels in almost 25 years, rose 1.2m barrels, compared with the consensus forecast for an increase of 1.5m barrels.
Distillate demand, which has been a concern to dealers, remained weak, averaging 3.30m b/d over the past four weeks, down 11 per cent compared with the same period a year ago.
On Thursday, Nymex August heating oil traded fractionally weaker at $1.7060 a gallon following a rise of 0.7 per cent in the previous session.