- POSTED: 01 Aug 2014 04:17
Oil prices in New York on Thursday (July 31) tumbled to their lowest level since mid-March helped by unplanned refinery shutdowns in the US midwest.
NEW YORK: Oil prices in New York on Thursday (July 31) tumbled to their lowest level since mid-March helped by unplanned refinery shutdowns in the US midwest.
The benchmark West Texas Intermediate for September delivery fell US$2.10 to US$98.17 a barrel on the New York Mercantile Exchange. In London, European benchmark Brent oil for September delivery declined 49 cents to US$106.02 a barrel.
Andy Lipow, head of Houston consultancy Lipow Oil Associates, said news that a number of midwest oil refineries were experiencing outages put a "significant amount of pressure on the WTI today." The concern is that crude inventories will build at the closely-watched Cushing, Oklahoma oil-trading hub where WTI is priced.
Lipow said traders are also looking ahead to planned maintenance in September at many refineries as the summer travel season ends. Analysts said oil likely garnered extra selling pressure from Thursday's rout in US equities.
While the US oil contract plummeted, Thursday's declines were modest in Brent, which is more leveraged to the international oil market. Key questions include the effect of new sanctions on Russian oil production and the impact of continued violence in Libya on the North African country's output.
Eurasia Group predicted Brent would continue to trade in the US$105-US$110 a-barrel range in the third quarter. "Concerns about geopolitical risk will continue to be supportive, particularly in relation to the perceived fragility of the partial recovery in Libyan production and a renewal of concerns about risks related to Iran," the consultancy said in a note.