Oil prices fell sharply today its lowest price in nearly two months after ample US fuel stockpiles eased investor fears of supply shortages as the US summer driving season comes to a close.
Although prices have fallen for four consecutive sessions, the market is still up 14 per cent this year on healthy global demand, geopolitical tensions and supply disruptions in key oil-producing countries.
US light, sweet crude for September delivery dropped $1.23 to $70.66 a barrel this afternoon, its lowest since June 26th. London Brent fell $1.04 to $71.79 a barrel.
US crude prices have tumbled more than 7 per cent, declining in six of the last eight sessions, as a ceasefire took hold in the Middle East and BP decided to shut in only half of its 400,000 barrels-per-day Prudhoe Bay oilfield for pipeline repairs.
Some dealers had feared the partial closure of the biggest oilfield in the United States might trigger a surprisingly large drawdown in this week's crude inventories, but data on Wednesday showed a decline of 1.6 million barrels, in line with forecasts.
Crude stocks have fallen from the eight-year high reached earlier this year, but they still remain higher than at almost any time since 1999, giving refiners a sizeable supply buffer to guard against any unexpected disruptions.
Gasoline inventories dropped by a deeper-than-expected 2.3 million barrels, but demand eased from the previous week as the summer driving season, which ends in early September, began to wind down.