Oil Prices Trade In A Range While Gas Prices Decline

Crude oil gained 19 cents this morning but remains within its weekly trading range adding in the Asian session and ending up where it started by the end of the US session. Brent oil gained 12 cents this morning following cues from WTI to trade at 102.81. West Texas Intermediate traded near the lowest price in seven months before supply data that will signal the strength of fuel demand in the U.S, the world’s biggest oil consumer. Oil prices were little changed in New York after falling 0.3 percent yesterday. Crude inventories probably shrank by 1.8 million barrels to 360.7 million last week; a Bloomberg News survey shows before an Energy Information Administration report tomorrow. Stockpiles have risen to the highest level for this time of the year since 1990 amid increased U.S. production. Libya’s output dropped because of power outages at some fields, according to state-run National Oil Corp.

Nymex crude oil prices slipped around 0.3 percent yesterday on the back of speculation that supplies at Cushing Oklahoma will increase for the fourth consecutive week. Further, strength in the DX exerted downside pressure on the prices. However, sharp downside in the prices was restricted due to concern that Libyan turmoil will curb the country’s oil output. Libya’s crude production slipped to 630,000 barrels a day from 656,000 barrels a day in yesterday’s trade.  The Libyan parliament that was replaced in an election in June reconvened on Monday and chose an Islamist-backed deputy as the new prime minister, leaving the chaotic country with two rival leaders and assemblies, each backed by armed factions. The United States is preparing military options to pressure the Islamic State in Syria, the U.S. military said on Monday. Iran has postponed by three months a conference to offer multinationals the rights to develop oil deposits, giving time for sanctions on the country’s oil sector to be lifted. Europe needs to enforce its energy strategy and will have to pay more for gas if it wants to improve the safety of supply and reduce its reliance on Russia. Additionally, concerns of geopolitical tensions after Egypt and United Arab Emirates secretly launched airstrikes two times in last week against Islamist-allied militias fighting for control of Tripoli cushioned sharp downside in the prices.

Natural gas eased by 7 points this morning after climbing steadily on Monday to close at 3.978 to trade at 3.971.  U.S. natural gas futures jumped more than 2 percent on Monday after meteorologists raised their temperature forecasts, anticipating a warm spell that could bump up demand for energy to power air conditioners.

 Gasoline prices continue to decline trading at 2.60 level. U.S. gasoline inventories probably dropped by 1.73 million barrels in the week ended Aug. 22, according to the median estimate in the Bloomberg survey of eight analysts. Distillate stockpiles, including heating oil and diesel, are forecast to have decreased by 300,000 barrels, the survey shows. US driving season is coming to a close with the Labor Day holiday next Monday. The American Petroleum Institute is scheduled to release separate supply data today. The industry group collects information on a voluntary basis from operators of refineries, bulk terminals and pipelines. The government requires that reports be filed with the EIA, the Energy Department’s statistical arm.