Data, inventories send crude prices lower

The price of crude oil dropped Wednesday on disappointing data and news from the United States and after the US Energy Information Administration reported that crude oil, gasoline and distillates inventories all grew last week.

September contracts for West Texas Intermediate crude were down $2.12 to $91.67 per barrel at nearly 1:30 p.m. on the New York Mercantile Exchange, while Brent crude was lately reported won $3.06 to $113.40 per barrel on the ICE Futures Europe exchange in London.

The good news was that private group ADP reported that the US private sector added 114,000 new jobs in July, but the Institute for Supply Management said that its services sector index dropped to 52.7 in July, down from 53.3 in June and against an expected rise.

Additionally, the US Commerce Department reported that US factory orders were down by 0.8 percent in the United States in June.

US President Barack Obama signed a bill raising the debt ceiling, but while Moody’s Investors Service and Fitch Ratings both reaffirmed their AAA ratings on US credit for now, Moody’s put a negative outlook on the raging and both ratings agencies warned that they could still cut the US credit rating if legislators did not follow through on debt reduction.

The EIA reported that crude oil inventories were up by 1 million barrels last week to 355 million barrels, 0.8 percent below last year’s levels and less of a gain than expected, while gasoline stockpiles added 1.7 million barrels to 215.2 million barrels against an expected gain of just 350,000 barrels and distillates added 400,000 barrels, much less than the expected gain of 1.8 million barrels.

Refineries worked at 89.3 percent of capacity in the United States last week, according to the EIA, a percentage point higher than the previous week, and it also reported that gasoline demand over the past four weeks was down 3.6 percent from last year during the same period.

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