INTERNATIONAL. Oil prices fell again Wednesday after the US government reported gasoline supplies rose far more than expected.
Light, sweet crude for September delivery, the new front-month contract, fell US$3.98 or 3.1% to settle at US$124.44 a barrel on the New York Mercantile Exchange.
The August contract expired Tuesday at US$127.95.
The Energy Department’s Energy Information Administration reported that crude inventories fell by 1.6 million barrels in the week ended 18 July, slightly less than analysts surveyed by energy research firm Platts predicted.
Perhaps more significant was the 2.9 million barrel jump in gasoline stockpiles. Analysts had expected an increase of only half a million.
The report also provided further evidence that cash-strapped Americans are cutting back on fuel. Demand for gasoline over the four weeks ended 18 July was 2.4% lower than a year earlier, averaging more than 9.3 million barrels a day.
Oil prices came under further pressure as the dollar strengthened against the euro.
The dollar’s decline has been a major factor in oil’s rapid ascent over the past year, as investors bought dollar-denominated crude contracts as a hedge against inflation and a weakening U.S. currency. But when the dollar strengthens, that currency-related buying can unwind.
Meanwhile, concerns that Hurricane Dolly might affect US oil and natural gas platforms in the Gulf of Mexico dwindled as the storm neared the Texas/Mexico border.