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SINGAPORE: Oil prices eased in Asian trade on Thursday as traders took note of high distillate inventories, which indicated that a global economic recovery was still sluggish, analysts said.
New York’s main futures contract, light sweet crude for delivery in September, slipped 27 cents to 72.15 dollars a barrel. The September contract expires later Thursday.
Brent North Sea crude for October delivery fell 26 cents to 74.33 dollars.
Market sentiment was dampened by data released by the US Department of Energy (DoE) Wednesday which showed distillate stocks, which were “a real indicator of economic growth,” at 27-year highs, said Jason Feer, Asia Pacific general manager of energy market analysts Argus Media in Singapore.
“There’re these huge overhangs with middle distillates… Distillate stocks are still extremely bloated,” he said.
Distillates, which include diesel and heating fuel, fell 700,000 barrels last week whereas analysts had pencilled in a gain of 500,000 barrels, but Feer said volumes were “still 15 to 20 percent above last year.”
He added that high levels of distillate stocks indicated that “economic growth is still quite sluggish.”
The drawback in crude prices reversed gains on Wednesday, when data from the DoE showing an unexpected fall in crude inventories, indicating healthy demand, pushed the market up.
The report showed American inventories of crude falling by a massive 8.4 million barrels last week, snapping a three-week run of gains.
That took traders completely by surprise because the market expected an increase of 1.5 million barrels.