US inventories in surprise increase

The US department of energy’s weekly report on crude oil inventories in the United States showed that stockpiles for crude oil, gasoline, and distillates were all up for the week ending June 24.

Oil inventories were up 1.1 million barrels, while gasoline stockpiles rose by 300,000 barrels and distillate inventories increased by 1.7 million barrels.

The rise in inventories came about because of an increase of crude oil imports to 11 million barrels per day and US refineries that operated at 96.3 percent of capacity.

These increases in stockpiles were not expected and they sent prices for crude oil and finished oil products down by about six percent under the record prices achieved on Monday.

In London at late afternoon, August deliver Brent crude on the International Petroleum Exchange had declined by 94 cents to $56.24 per barrel.

In early afternoon trading on the New York Mercantile Exchange, prices for August contracts of West Texas Intermediate had settled at a decline of $1.00 to $57.20 per barrel, after having been down $1.30 at one point earlier in the day.

This drop came after a price decline of $2.34 on Tuesday. In addition, Nymex gasoline futures for July had declined 2.23 cents to $1.6025 per gallon, while heating oil for July delivery had fallen 2.04 cents to $1.6000 per gallon.

In New York, one analyst put the blame for the sharp increase in prices earlier in the week on the presidential election in Iran, but he said that it would take “more than that” for prices to remain at the $60 per barrel level.