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WTI Drops for Second Day as Fuel Stockpiles Expand; Brent Steady

July 23 (Bloomberg) -- West Texas Intermediate crude fell for a second day after an industry report showed gasoline supplies expanded in the U.S., the world’s biggest oil consumer. Brent was steady in London.

Futures dropped as much as 0.6 percent in New York. Gasoline inventories increased 3.6 million barrels last week, the American Petroleum Institute was said to have reported yesterday. Stockpiles probably rose by 1 million, according to a Bloomberg News survey of analysts before government data today. Brent traded near a two-day low amid speculation that further sanctions on Russia over the downing of a Malaysian Air jet will have no impact on supplies.

“There’s some nervousness that the demand that was anticipated is not coming through, so we’ll see a cautious session leading into those numbers tonight,” Michael McCarthy, a chief strategist at CMC Markets in Sydney, said by phone. “Sanctions on energy supplies would be a real drag on the broader European economy, so it’s unlikely they will be introduced.”

WTI for September delivery slid as much as 60 cents to $101.79 a barrel in electronic trading on the New York Mercantile Exchange and was at $102.05 at 11:10 a.m. Sydney time. The August contract expired yesterday after decreasing 17 cents to $104.42. The volume of all futures traded was about 14 percent below the 100-day average. Front-month prices have climbed 3.7 percent this year.

Brent for September settlement was 2 cents lower at $107.31 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude traded at a premium of $5.25 to WTI. The spread closed at $4.94 yesterday, widening for the first time in three days.

U.S. gasoline inventories probably declined to 213.5 million barrels in the week ended July 18, according to the median estimate of nine analysts surveyed before today’s Energy Information Administration report.

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