Oil futures slid to fresh multi-month lows Tuesday ahead of weekly inventory data, which is expected to show that U.S. oil supplies shrank but product stockpiles grew last week.
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Light, sweet crude for September delivery fell 91 cents, or 0.9%, to $97.38 a barrel on the New York Mercantile Exchange, the lowest price since Feb. 5. Brent crude on the ICE futures exchange fell 80 cents, or 0.8%, to $104.61 a barrel, the lowest level since Nov. 7, 2013.
Analysts expect the U.S. Energy Information Administration to report that domestic oil supplies fell by 1.7 million barrels in the week ended Aug. 1, according to a Wall Street Journal survey. Supplies typically fall at this time of year as refineries run at high rates before entering seasonal maintenance in the fall. However, the busy summer-driving season is coming to an end on Labor Day, and product markets are already well-supplied.
"Products are amply supplied across the globe, a situation that is unlikely to change appreciably even as refinery activity ramps down seasonally into the fall," said energy-advisory firm Ritterbusch & Associates in a note.
Gasoline stockpiles are expected to rise by 100,000 barrels, while stocks of distillates, including heating oil and diesel, are expected to rise by 600,000 barrels, according to the survey.
The closely watched survey is due at 10:30 a.m. EDT Wednesday.
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The American Petroleum Institute, an industry group, said late Tuesday that its own data for the same week showed a 5.5-million-barrel draw in crude supplies, according to industry sources. The API also said that gasoline supplies fell by 3.6 million barrels and stocks of distillates declined by 544,000 barrels, according to the sources.
Despite violence in Iraq, Libya, Ukraine and elsewhere, global oil supplies remain ample and traders are less concerned about a large supply interruption.
Brent, the global benchmark, is down 9.1% from mid-June, when prices hit nine-month highs on concerns about the situation in Iraq.
"A lot of the geopolitical premium, I think, has basically come out over the last week, week and a half," said Tariq Zahir, managing member of Tyche Capital Advisors. "We're producing enough crude oil out there."
The dollar also strengthened Tuesday as investors, worried about an escalation in violence between Russia and Ukraine, sought safer assets. A strong dollar makes oil more expensive to buyers using foreign currencies.
Front-month September reformulated gasoline blendstock, or RBOB, settled down 0.94 cent, or 0.3%, at $2.7155 a gallon, the lowest price since Feb. 6. September diesel settled down 2.43 cents, or 0.9%, at $2.8469 a gallon.