Oil prices ended lower with the West Texas Intermediate contract recording its biggest monthly slide since the 2008 financial crisis on an increase in the US production levels, signs that the top Middle East producers continued pumping at record levels, and a slide in China’s stocks.
Light sweet crude for September delivery ended $1.40 or 2.9% lower at $47.12 a barrel on the New York Mercantile Exchange. Based on the most active contracts, WTI oil ended 2.9% on the week and more than 20% lower for month.
Brent futures ended $1.10 or 2.1% at $52.21 a barrel on the London based ICE Futures Exchange. Brent ended more than 5% lower for the week and has ended 18% lower for the month.
According to oil field services provider Baker Hughes, the number of active oil rigs in the US grew for the second straight week. According to the weekly report, the US rig count grew by 5 this week to about 664.
Coupled with the larger than expected production levels reported by the Organization of Petroleum Exporting Countries, the data showed that the persistent oil glut showed no sign s of abating any time in the near future.
A survey conducted by Reuters on Friday showed that the Organization of Petroleum Producing Countries pumped more than 32 million barrels a day in July, an increas4e of about 144,000 barrel per day from the previous month.
The news offset positive market sentiment from the report by the US Energy Information Administration that showed that crude inventories in the US fell more than expected last week.
“It’s just one more thing that adds to that bearish feel to the market,” John Saucer, vice president of research and analysis at Mobius Risk Group in Houston, told the Wall Street Journal.
“Oil prices are likely to test their lows for 2015. Production has really overwhelmed demand, even though demand is up.”
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