Crude-oil futures extended losses to a second session Monday as concerns over plentiful supplies outweighed tensions in oil-producing regions like the Middle East. On the New York Mercantile Exchange, light, sweet crude futures for delivery in October lost 30 cents, or 0.3%, to settle at $93.35 a barrel, its fourth loss in the past six sessions. Nymex crude has now been down for four consecutive weeks while Brent has been down for three of the past four weeks.
The Obama administration is considering a wider military campaign against Islamic State militants in Iraq and Syria, after the beheading of American journalist James Foley. The Islamic State has made advances with the capturing of a major air base in a province in northeastern Syria.
Oil futures were exhibiting “the same tolerance for geopolitical risk that has become the established norm,” said Tim Evans, an analyst with Citi Futures. “Reports of rising June inventories in China may reinforce the market’s sense of oversupply, although we note that’s more of a look back at the (second quarter) seasonal surplus than a measure of current conditions,” he added. The current supply of light crude seems sufficient to meet global demand and producers including Libya are having trouble selling cargos, Barclays analyst Michael Cohen said in a report.