On the New York Mercantile Exchange, light, sweet crude futures was down $2.10, or 2.1%, to end at $98.77 a barrel. That was the lowest settlement since March 17, and one that brings monthly losses to 6.8%, snapping a two-month winning streak. The monthly decline was the largest since May 2012. U.S. oil stockpiles fell by 3.7 million barrels in the week ended July 25, compared with market estimates of a 1.8 million-barrel decline, the U.S. Energy Information Administration said Wednesday.
U.S. refineries continue to operate at peak summer levels, but poor U.S. refining margins, especially on the Gulf Coast may soon lead to run cuts or early maintenance by end-August, Société Générale said. Lower refinery runs would reduce crude-oil demand and weigh on prices.
“The price action suggests that the news flow, as supportive as it might be in another context, has simply not been enough to shut off the flow of managed money long liquidation of the past few weeks,” analyst Tim Evans at Citi Futures said. The week ended July 22 had shown a sharp increase in selling by money managers in both Brent crude oil and gasoil derivatives.