Where could oil prices go in the near future?
''Oil prices dropped to their lowest level in almost six weeks after government data showed an unexpected increase in U.S. inventories of crude, reigniting worries about oversupply.
Light, sweet crude for September delivery fell $1.10, or 1.6%, to $67.66 a barrel on the New York Mercantile Exchange, its lowest close since June 21. U.S. oil prices are 8.8% below their June multiyear high.
Prices have been volatile in recent weeks, with some traders expecting higher supply among some of the world’s largest producers, including Saudi Arabia and Russia, to cool a monthslong rally. U.S. government data showing steady production also hurt prices.
The Energy Information Administration said U.S. commercial stockpiles of crude rose by 3.8 million barrels last week, to 409 million barrels. The increase means inventories are just 1% below the five-year average for this time of year, versus nearly 5% below that average about a month ago.
''The real problem for the U.S. crude market looms in September- that’s when the turnarounds at a number of refineries begin in earnest,'' said Tom Kloza, global head of energy analysis at the Oil Price Information Service. He indicated more inventory increases may be in the offing as refineries begin scheduled tuneups that won’t allow them to take in as much crude oil.
The EIA report also showed U.S. crude-oil exports were cut by more than half to 1.3 million barrels a day last week from the week before. Analysts said the weekly change isn’t overly worriesome, but any trend toward further declines in exports could suggest U.S. producers are having a tougher time selling U.S. crude to global buyers such as China.
Recent declines in oil prices also have hurt shares of energy companies. The S&P 500 energy sector dropped 1.3%. ''