Crude Oil Prices Continue to Slide
Crude oil and natural gas futures were under heavy selling pressure Thursday, the former driven by a continuing downtrend and the latter by a surprisingly large build in weekly storage levels.
Texas light sweet crude for August delivery was recently down $3.85 at $130.75 a barrel, and Brent crude was losing $3.59 at $132.22 a barrel.
Reformulated gasoline was losing 9 cents to $3.19 a gallon, and heating oil was off 6 cents at $3.78 a gallon. Near-term natural gas was down 89 cents at $10.51 per million British thermal units -- a nearly three-month low -- after the Energy Information Administration revealed that total U.S. stockpiles grew by 104 billion cubic feet during the week ended July 11. Analysts were expecting an 88 BCF increase, according to a survey conducted by
Bloomberg
.
Total natural gas in storage now lies at 2.312 trillion cubic feet, just shy of its 5-year average of 2.361 trillion cubic feet.
Crude oil entered the Nymex session severely bruised and battered after August WTI lost 8% in the prior two trading days. A generally sour outlook for the U.S. economy and signs of falling demand have nudged the oil market into what could be its weakest state since its three-month stall in the fourth quarter.
Demand deterioration for crude and its derivative products has the energy markets thoroughly spooked. The Energy Information Administration reported on Wednesday that U.S. motor gasoline consumption over the past four weeks was 2.2% lower than the same period last year.
"Rising products inventories, a depressed
refinery crack market and a widening contango in the front of crude oil's forward curve ... underscore the weak fundamental state of the market," wrote Stephen Schork, an analyst and publisher of
The Schork Report
, in a research note.
"Whether bears are able to take out
oil's technical support remains to be seen, but one thing is for sure: the fundamental ducks are lining up. With each passing week, it gets harder for the bulls to spin this market," Schork added.
Meanwhile, energy stocks were suffering. Among the integrateds,
ConocoPhillips
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(COP) - Get ConocoPhillips Report
was down 0.4% at $82.89,
Chevron
(CVX) - Get Chevron Corporation Report
was losing 0.9% at $85.66, and
Exxon Mobil
(XOM) - Get Exxon Mobil Corporation Report
was 0.6% lower at $80.32.
In the exploration and production space,
Apache
was falling 4.1% at $109.78,
Chesapeake Energy
(CHK) - Get Chesapeake Energy Corporation Report
was down 7.1% at $52.60,
Cabot Oil & Gas
(COG) - Get Cabot Oil & Gas Corporation Report
was more than 9% lower at $50.92, and
XTO Energy
(XTO)
was sliding 6.8% to $53.98.
The
U.S. Oil
(USO) - Get United States Oil Fund LP Report
, an exchange-traded fund that closely tracks the performance of near-month WTI contracts on the Nymex, was declining 2.9% at $106.16.
