Nigerian oil output rose last month following repairs to infrastructure that had been damaged by militant attacks. Nigeria pumped an average of 1.53 million barrels a day in June, up about 90,000 a day from May. Militants have resurfaced this month, with the Niger Delta Avengers group carrying out attack on five crude-pumping facilities overnight last Sunday.
Production in Saudi Arabia, the biggest crude exporter, rose by 70,000 barrels a day to 10.33 million last month, the survey showed. The kingdom typically burns more crude in the summer to generate electricity for air conditioners. Libya raised output by 40,000 barrels a day to 320,000.
Crude dropped with equities on a gloomy outlook for the global economy and amid signs that oil stockpiles remain ample. Futures fell as much as 3.3 percent in New York as stock markets declined. Crude has risen more than 80 percent from a 12-year low in February amid supply disruptions and falling U.S. output. Yet the price rebound has spurred activity in the American shale patch, where drillers last week brought back the most oil rigs of any week this year. Contango, the structure where prices for delivery today are lower than those in future months, is shrinking, a sign that stockpiles are plentiful.
“It’s a risk-off day across the markets,” said Bob Yawger, director of the futures division at Mizuho Securities USA in New York. “OPEC production estimates are making the rounds and they’re showing a rise in Nigerian production, which is negative for the oil market. The contango is coming in, which is the classic sign of oversupply.”
West Texas Intermediate for August delivery slipped $1.59, or 3.2 percent, to $47.40 a barrel at 9:22 a.m. on the New York Mercantile Exchange. There was no settlement on the Nymex Monday because of the U.S. Independence Day holiday. Trades will be booked Tuesday for settlement purposes.
Brent for September settlement fell $1.40, or 2.8 percent to $48.70 a barrel on the London-based ICE Futures Europe exchange. The global benchmark crude traded at a 61-cent premium to WTI for the same month. Gasoline stockpiles along the U.S. East Coast surged to a record 72.5 million barrels in the week ended June 24, according to data from the Energy Information Administration. Imports to the region jumped to a six-year seasonal high. Gasoline production in the U.S. hit a record the previous week as refineries ran full-out to meet driving-season demand.
