By Nicole Friedman and Francesca Freeman
NEW YORK--U.S. oil futures held near multi-month lows Tuesday as
ample oil supplies continued to weigh on the market, while
petroleum-product prices bounced higher on expectations of stronger
U.S. demand.
U.S. oil prices have slumped 11% since hitting nine-month highs
in mid-June, as investors perceived lower risk to oil supplies in
Iraq, Russia and elsewhere and focused instead on high supplies.
Brent, the global benchmark, settled Monday at a 14-month low after
reports that Libyan production increased last week.
Light, sweet crude for September delivery recently fell 64
cents, or 0.7%, at $95.77 a barrel on the New York Mercantile
Exchange. The September contract expires at settlement Wednesday.
The more-actively traded October contract rose 6 cents, or 0.1%, to
$93.81 a barrel.
Brent traded down 17 cents, or 0.2%, at $101.43 a barrel.
Expectations for robust fuel demand are boosting the U.S.
market, said Schneider Electric SA, an energy-consulting firm, in a
note Tuesday.
U.S. gasoline and distillate supplies, including diesel fuel and
heating oil, have fallen in recent weeks, even as refineries have
run at unusually high rates to produce more. The busy
summer-driving season lasts through the end of the month.
The U.S. Energy Information Administration is set to release its
storage data for the week ended Aug. 15 on Wednesday. Analysts are
completing their estimates, but some say they expect continued
draws in petroleum-product supplies.
Front-month September reformulated gasoline blendstock, or RBOB,
recently rose 2.59 cents, or 1%, to $2.6819 a gallon. September
diesel gained 1.17 cents, or 0.3%, to $2.8177 a gallon.
Despite steadying Tuesday, oil prices look likely to remain in a
downward trend, analysts at Commerzbank said.
Oil "is still under pressure from a combination of factors:
plentiful supply, a lack of supply outages and weak refinery
demand," the bank said.
Trade is likely to be jittery on the London oil market this week
as trade thins ahead of a long weekend in the U.K., said Andrey
Kryuchenkov, a commodities strategist at VTB Capital.
"Brent remains sensitive to any macro headlines," he added.
Write to Nicole Friedman at nicole.friedman@wsj.com and
Francesca Freeman at francesca.freeman@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires