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US oil prices fall to six-month low on demand concerns

Oil prices in New York on Tuesday (Aug 5) fell to a six-month low on concerns about weak gasoline demand in the US and lacklustre Chinese economic data.

NEW YORK: Oil prices in New York on Tuesday (Aug 5) fell to a six-month low on concerns about weak gasoline demand in the US and lacklustre Chinese economic data.

US benchmark West Texas Intermediate for September delivery dropped 91 cents to $97.38 a barrel on the New York Mercantile Exchange. European benchmark Brent oil for September delivery fell 80 cents to $104.61 a barrel on the New York Mercantile Exchange.

WTI, which has fallen five of the last six days, dropped again as traders looked ahead to Wednesday's weekly US energy inventory report. Analysts expect a 1.7 million drop in oil inventories, but a rise in both gasoline and distillate stocks, according to a survey of analysts by the Wall Street Journal.

Weak demand for petroleum products has been "a persistent overhang" all summer during the peak driving season, said John Kilduff, founding partner of hedge fund Again Capital. Analysts also cited disappointing data from China, the second-biggest oil consumer after the US, as a factor in Tuesday's drop.

The HSBC China services Purchasing Managers' Index slipped to 50.0 in July, the dividing line between expansion and contraction, down from 53.1 in June.

Kilduff also cited a report that said Libya's Es Sider port could soon resume exports, in spite of persistent violence in Tripoli and other parts of the country.

Analysts continue to monitor key petroleum exporters Iraq and Russia as well as Libya, said Tim Evans, analyst at Citi Futures. "We continue to see material risk to supply from Libya, Iraq, and Russia, but the market over the past six weeks has become increasingly complacent regarding supplies," Evans said in a note.

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