Brent oil falls fourth time in five days on Europe's economic woes

Brent oil dropped for the fourth time in five days as the euro bloc's economic recovery stalled. West Texas Intermediate decreased after US crude stockpiles increased last week for the first time since June.

Futures fell as much as 1.7 per cent in London. Euro-area gross domestic product in the three months through June was unchanged from the first quarter, according to Eurostat, the European Union's statistics office in Luxembourg. Libya will reopen its largest oil export port within days, the National Oil Corp said. US crude supplies rose 1.4 million barrels, Energy Information Administration data showed yesterday.

"There's growing concern about the European economy and what that will mean for fuel demand," said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut. "There are ample supplies here and throughout the Atlantic basin, which is weighing on both Brent and WTI." Brent for September settlement, which expires today, fell $1.65, or 1.6 per cent, to $102.63 a barrel on the London-based ICE Futures Europe exchange at 10:12 am New York time. The more-active October contract dropped $1.69, or 1.6 per cent, to $103.37. The volume of all futures traded was 11 per cent above the 100-day average for the time of day.

WTI for September delivery dropped 69 cents, or 0.7 per cent, to $96.90 a barrel on the New York Mercantile Exchange. Volumes were 27 per cent higher than the 100-day average. The US benchmark crude traded at a $5.73 discount to Brent, down from $6.69 on Wednesday.

The 18 countries using the euro were projected to have grown 0.1 per cent last quarter, according to the median of 37 forecasts in a Bloomberg survey.

German slowdown

Having led the bloc out of its longest-ever recession last year, Germany's economy shrank 0.2 per cent in the second quarter, its first contraction since 2012, while France unexpectedly stagnated, data showed on Thursday. Italy succumbed to its third recession since 2008, with GDP falling 0.2 per cent in the April-June period.

In Libya, the Es Sider port is scheduled to start loading crude in days, according to Mohamed Elharari, a spokesman at state-run National Oil Corp. The facility, along with Ras Lanuf, was handed over last month by rebels seeking self-rule in the eastern regions. All other Libyan terminals were open except for Zueitina, where workers were engaged in a dispute with management, Elharari said yesterday.

Retake Positions

Kurdish forces are fighting to retake positions overrun by Islamic State fighters in northern Iraq. President Barack Obama, who authorized limited air attacks against Islamic State after it made rapid gains last week, has tied expanded U.S. action to the formation of a more inclusive Iraqi government capable of easing sectarian and ethnic divisions.

"The fact that prices are falling at all given all the geopolitical tension shows that there's a lot of bearish sentiment in the market," said Kyle Cooper, director of research with IAF Advisors and Cypress Energy Capital Management in Houston. "It looks like the move lower will continue in the near term. The market could easily drop to the lower $90s." Gasoline stockpiles in the U.S., the world's biggest oil consumer, fell by 1.16 million barrels to 212.7 million in the week ended Aug. 8, according to the EIA, the Energy Department's statistical arm. Inventories of distillate fuel, a category that includes heating oil and diesel, decreased by 2.42 million barrels to 122.5 million.

Gasoline for September delivery tumbled 3.78 cents, or 1.4 percent, to $2.7166 a gallon on the Nymex. Pump prices fell 0.2 cent to $3.471 a gallon nationwide yesterday, the lowest since March 4, according to AAA, the largest U.S. motoring group.