Oil prices on Thursday, July 20, retreated a day after a third consecutive weekly declines in U.S. crude supplies lifted prices to a six-week high.
Traders weighed outcome scenarios for a crucial meeting of some of the world’s biggest producers next week.
September Brent LCOU7, -0.85% lost 40 cents, or 0.8%, to $49.30 a barrel on ICE Futures Europe, after tapping a high of $50.19.
The August contract for West Texas Intermediate crude CLQ7, -0.83% which expired at the day’s settlement, fell 33 cents, or 0.7%, to finish at $46.79 a barrel on the New York Mercantile Exchange. The new front-month contract, September WTI oil CLU7, +0.02% ended at $46.92, down 40 cents, or 0.9%.
Futures prices for WTI and Brent finished Wednesday at the highest levels since June 6, according to FactSet data, after the Energy Information Administration showed that U.S. crude inventories declined by a larger-than-expected 4.7 million barrels for the week ended July 14.
But WTI oil prices are “still not moving anywhere close to the $50 level regardless of what the crude inventory data will show us,” said Naeem Aslam, chief market analyst at ThinkMarkets UK.
“The supply glut is still very much the focus,” he said. “As long as we do not see the glut fading in a meaningful way, we think the odds are stacked against the upward move for the oil price.”
Accelerating U.S. production is a major threat to the effort led by the Organization of the Petroleum Exporting Countries to tackle a years-old global glut of oil. Output growth from Libya and Nigeria, OPEC members which aren’t part of the group’s production-cut agreement, has also been a key concern.
OPEC oil ministers are to gather for a monthly meeting to monitor producer compliance with output quotas Monday in St. Petersburg, Russia. It is expected to include some non-OPEC producers—notably Russia. Libya and Nigeria have reportedly been invited to attend as well.
Back on Nymex, August gasoline RBQ7, +0.03% shed 1.1 cents, or 0.7%, to $1.606 a gallon, while august heating oil HOQ7, +0.06% fell less than a cent, or 0.5%, to $1.544 a gallon.
Natural-gas prices followed energy peers lower, giving back the gains seen after the EIA reported Thursday that U.S. supplies of natural gas rose a bit less than expected last week. Natural-gas inventories climbed by 28 billion cubic feet.
August natural gas NGQ17, -0.53% settled at $3.043 per million British thermal units, down 2.3 cents, or 0.8%.
