Oil continues slide on inventory glut

This March 13, 2012 photo shows older and newly constructed 250,000 barrel capacity oil storage tanks at the SemCrude tank farm north of Cushing, Oklahoma. Despite reports of lower US inventories, oil prices continued their slide due to uncertainty over a global oversupply. AP

NEW YORK, United States — Oil futures were down again on Monday as investor concerns about a supply glut showed no sign of letting up.

West Texas Intermediate benchmark crude for September delivery lost $1.06 on the New York Mercantile Exchange, sinking to $43.13, its lowest level in three months.

In London, North Sea Brent crude for September hit its lowest price since May, sinking 97 cents to $44.72 on the Intercontinental Exchange.

“You really have a hangover from last week’s EIA storage report,” said Bob Yawger of Mizuho Securities, referring to weekly numbers released by the US Energy Information Administration.

The EIA reported last week that crude inventory had fallen by a less-than-expected 2.3 million barrels, and that gasoline supplies had risen during the US driving season, a time of peak demand.

“The gasoline numbers are so overwhelming now it’s hard to pin a bullish scenario as far as storage is concerned.”

Analysts say the strong dollar is also putting pressure on demand for oil futures as this effectively raises prices for holders of other currencies.