Crude oil prices down ahead of US stockpiles report

Oil prices edged lower in Asia today as dealers await the latest US stockpiles report for clues about demand in the world’s top crude consumer.

US benchmark West Texas Intermediate crude for August delivery eased two cents to $103.38, while Brent crude was down 13 cents at $108.81 in mid-morning trade.

“The official US stockpile numbers out later today will be scrutinised by investors who want a sense of US demand as the driving season heats up,” Michael McCarthy, chief market strategist at CMC Markets in Sydney, said.

Investors typically expect a spike in US demand during the summer months when Americans traditionally take to the roads for their holidays.

Reserves are expected to have fallen two million barrels in the week to July 4, according to analysts polled by the Wall Street Journal.

Gasoline, distillates

Gasoline stockpiles also likely fell 300,000 barrels, while the stocks of distillates, which include heating oil and diesel, are expected to have climbed 1.3 million barrels.

McCarthy said oil prices remain under pressure due to “eroding risk premiums attached to tense situations in the Middle East’’.

Libya crisis

Brent crude has fallen more than $3 since July 3 after Libya’s interim Prime Minister Abdullah Al-Thani declared that authorities have regained control of two export terminals blockaded by rebels.

The ports at Ras Lanuf and Al-Sidra could add about 500,000 barrels of crude per day to global energy markets, analysts say.

Jihadist attacks

In Iraq, a jihadist insurgency that has overrun large swathes of Iraq north and west has yet to impact on the country’s key oil assets in the south.

Iraq is the second biggest producer in the 12-nation OPEC oil cartel, pumping 3.4 million barrels a day and possessing more than 11 percent of the world’s proven reserves.

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