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Oil heads for biggest monthly loss in a year amid inventory glut
[HONG KONG] Oil headed for the biggest monthly decline in a year as brimming crude and fuel inventories stifle a price recovery.
Futures dropped as much as 0.5 per cent in New York, down 15 per cent for the month. US crude inventories rose for the first time since May while gasoline stockpiles expanded through July 22, swelling a surplus of supplies that are at the highest seasonal level in at least two decades.
Libya's biggest oil ports are reopening after a dispute with guards at the facilities was settled.
Oil has slipped about 20 per cent since early June after almost doubling from a 12-year low in February as supply disruptions from Nigeria to Canada trimmed a worldwide surplus.
Producers including BP Plc, Royal Dutch Shell Plc and Total SA reported sharp declines in second-quarter earnings as lower prices continued to take their toll.
"There is too much oil in the market, there's an incredible amount," said Jonathan Barratt, the chief investment officer at Ayers Alliance Securities in Sydney.
"Oil is in a range of US$40 to US$50 a barrel and prices below US$40 a barrel are going to be a problem."
West Texas Intermediate for September delivery lost as much as 19 US cents to US$40.95 a barrel on the New York Mercantile Exchange and was at US$41.08 at 8:48 am Hong Kong time. The contract fell 1.9 per cent to US$41.14 on Thursday, the lowest close April 19.
Total volume traded was about 37 per cent below the 100-day average. The monthly drop is the biggest since July 2015.
Brent for September settlement, which expires Friday, dropped 1 US cent to US$42.69 a barrel on the London-based ICE Futures Europe exchange. Prices are down 14 per cent this month, the most since December.
The more-active October contract added 1 US cent to US$43.24. The global benchmark traded at a premium of US$1.63 to WTI for September.