Oil prices fall after US data shows lackluster gasoline demand

Crude oil storage tanks are seen at the Kinder Morgan terminal in Sherwood Park near Edmonton, Alberta, Canada November 14, 2016. REUTERS/Chris Helgren

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  • U.S. Crude Inventories Fall, Gasoline Inventories Rise – EIA
  • EIA data shows lackluster gasoline demand – analysts
  • Efforts by central banks to limit inflation weigh on prices

NEW YORK, July 20 (Reuters) – Oil prices tumbled on Wednesday after U.S. government data showed a drop in demand for gasoline during the peak of the summer driving season and oil rate hikes. Interest by central banks in tackling inflation is fueling fears that the economy will slow, reducing demand for energy. .

Brent crude prices for September fell 37 cents to $106.98 a barrel as of 11:02 a.m. EDT (1502 GMT). U.S. West Texas Intermediate (WTI) crude for August fell $1.87, or 1.8%, to $102.35 a barrel. The WTI contract expires on Wednesday.

The more active September WTI contract was at $99.87 a barrel, down 87 cents.

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U.S. gasoline inventories (USOILG=ECI) rose more than expected last week, gaining 3.5 million barrels to 228.4 million barrels, the EIA said. Analysts had predicted a rise of 71,000 barrels.

Gasoline product supplied – an indicator of demand – was about 8.5 million barrels per day, the data showed.

“Gasoline demand is below average to say the least,” said John Kilduff, partner at Again Capital LLC in New York. “It is certain that these high gasoline prices have shaken consumer confidence.”

American motorists were shocked this summer as pump prices hit a record high of over $5 a gallon in June.

Meanwhile, crude inventories (USOILC=ECI) fell 446,000 barrels last week to 426.6 million barrels, compared to analysts’ expectations in a Reuters poll for a 1.4 million barrel rise. .

Oil prices have been extremely volatile, caught in a tug of war between supply fears caused by Western sanctions against Russia and fears that the fight against inflation could weaken the global economy and reduce demand. Read more

On Friday, open interest in New York Mercantile Exchange futures fell to its lowest level since September 2015 as fears that the Federal Reserve would continue to raise U.S. interest rates led investors to cut their exposure to risky assets.

Analysts expect tighter oil supply to continue to support prices as US shale oil production increases at a modest pace.

“With little room for OPEC+ to increase production, the oil market will struggle to balance out in the coming months, supporting prices,” said Stephen Brennock of oil broker PVM.

On Tuesday, ConocoPhillips (COP.N) chief executive Ryan Lance warned of impending crude oil shortages and price volatility. Read more

Tight supplies kept Brent above $105 a barrel and caused inter-month Brent spreads to pull back significantly above $4.40 a barrel. In a lagging market, prices in the first month are higher than those in subsequent months.

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Reporting by Stephanie Kelly in New York; additional reporting by Rowena Edwards, Florence Tan and Laura Sanicola Editing by Barbara Lewis, David Goodman and David Gregorio

Our standards: The Thomson Reuters Trust Principles.

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