Crude oil is tumbling again after its worst month in a year

"We've had crude builds during the summer, when we were supposed to be having runaway draws from record driving".

Oil prices have trended lower for the past two fortnights in a row. The weekly active U.S. crude oil rig count rose by three to 374 rigs between July 22-July 29, 2016.

Tamar Essner, energy director at Nasdaq Advisory Services, said Monday oil prices could easily trade to $39 or below on an intraday basis, but are likely to find a long-term floor at $40 a barrel.

A glut of gasoline could weigh significantly on oil prices, which have been lifted in recent weeks by supply disruptions and healthy petrol demand in emerging markets. This August, U.S. oil prices declined 14 percent, its poorest monthly performance since last July.

NEW YORK, Aug 1 Global equity prices steadied near their highest in nearly a year on Monday as investors pared expectations of any near-term rise in USA interest rates, but lower oil prices kept a lid on gains. It's down by 19 per cent since early June, bringing it close to the 20 per cent drop that would characterise a bear market.

Oil majors ExxonMobil Corp, BP Plc, Royal Dutch Shell Plc and Chevron Corp each had a poor second quarter because of weak refining margins for crude. The September contract expired Friday after falling 24 U.S. cents to US$42.46, capping a 14.5 per cent drop for the month.

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Monday's slide in crude prices also came after Marathon Petroleum unexpectedly shut its lone crude unit and an associated unit at its 212,000 barrel-per-day refinery in Robinson, Illinois, at the weekend, according to a source. Brent for October settlement fell $1.49 to $42.04 a barrel on the London-based ICE Futures Europe exchange. United States crude oil production is expected to fall in the Eagle Ford and Bakken Shale regions during the same period.

The analysts foresee "worrisome trends" for oil supply and demand, led by refineries generating too much gasoline in recent months.

The energy markets have also displayed nervousness over increased drilling activity in the U.S. The Baker Hughes rig count rose last week for the fifth week in a row, a sign that American drillers have been emboldened to drill more.

-Stubbornly high U.S. oil inventories, which rose by 1.7 million barrels in the week ended July 22, according to the U.S. Energy Information Administration's Wednesday report.

Iraq reaped $3.744 billion from oil exports in July, Oil Ministry spokesman Asim Jihad said in a statement.

  • Wendy Palmer