The increase in US gasoline inventories drove down RBOB futures by over 3%, tugging mainstream Brent and US crude futures lower with them.
“Oil futures are being dragged down by gasoline futures.
“The industry continues to turn a crude oil surplus into a gasoline and distillate product surplus,” Andrew Lipow, president of Lipow Oil Associates said.
After rising for three consecutive days, Brent crude futures were down $1.67 (€1.48), or 3.4%, at $47.05 a barrel. US West Texas Intermediate crude, meanwhile, fell $1.66, or 3.6%, to $44.80 per barrel. That decline pushed both contracts to their lowest since May 5, driving them into the technically oversold territory.
The IEA said it expected growth in non-OPEC supply to be higher next year than growth in overall global demand.
“For total non-OPEC production, we expect production to grow by 700,000 barrels per day this year, but our first outlook for 2018 makes sobering reading for those producers looking to restrain supply,” the IEA said in its monthly oil market report.
“The outlook for oil hinges on the effectiveness of the Opec cuts relative to the supply increases from US shale,” said William O’Loughlin, analyst at Australia’s Rivkin Securities. n Reuters