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WTI Oil Slips for Ninth Day on Cushing Supplies; Gasoline Drops

July 9 (Bloomberg) -- West Texas Intermediate oil fell for a ninth day, the longest stretch of declines since 2009, after supplies rose at Cushing, Oklahoma, the contract’s delivery point. Gasoline slipped to a one-month low.

Cushing stockpiles rose by 447,000 barrels to 20.9 million last week, Energy Information Administration data showed. Gasoline inventories rose 579,000 barrels to 214.3 million as demand slipped unexpectedly. Brent fell to a one-month low amid signs Libyan oil exports will gain.

“The rise in Cushing supply is going to put further pressure on WTI,” said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. “Gasoline is looking very weak, which is going to drag crude oil down with it. Gasoline demand was anticipated to rise over the holiday because of the improving economy.”

WTI for August delivery dropped 99 cents, or 1 percent, to $102.41 a barrel at 12:01 p.m.on the New York Mercantile Exchange. It traded at $102.59 before the release of the report at 10:30 a.m. in Washington. Futures touched $102.26, the lowest level since June 5. Prices have risen 4.1 percent this year.

Gasoline for August delivery dropped 2.91 cents, or 1 percent, to $2.9438 a gallon in New York after the supply gain. Analysts surveyed by Bloomberg expected a decline of 400,000 barrels. Futures reached $2.935, also the lowest price since June 5.

Refinery Operations

Consumption of gasoline slipped 233,000 barrels a day to 8.94 million, down 3.9 percent from a year earlier. The most Americans in seven years were projected to travel by car over the July 4 Independence Day holiday, Heathrow, Florida-based AAA, the biggest U.S. motoring organization, said in a June 26 statement.

Refineries operated at 91.6 percent of capacity, up 0.2 percentage point from the prior week. Refinery runs climbed to 16.3 million barrels a day, the most since July 2005.

Nationwide crude inventories dropped 2.37 million barrels to 382.6 million, in line with the 2.5 million-barrel U.S. supply drop projected by analysts surveyed by Bloomberg. Stockpiles rose to 399.4 million barrels in the week ended April 25, the most since the EIA began publishing weekly data in 1982.

U.S. crude production increased 72,000 barrels a day to 8.514 million, the most since October 1986. Output has surged this year as a combination of horizontal drilling and hydraulic fracturing, or fracking, has unlocked supplies trapped in shale formations, including the Bakken in North Dakota and the Eagle Ford in Texas.

Libyan Supply

Libya plans to boost exports gradually to avoid disrupting the market, said Samir Kamal, the nation’s governor to the Organization of Petroleum Exporting Countries. The country has 7.5 million barrels of oil stored at the ports of Es Sider and Ras Lanuf after lifting force majeure, Oil Ministry Measurement Director Ibrahim Al-Awami said by phone on June 7. Production was 327,000 barrels yesterday, National Oil Corp. spokesman Mohamed Elharari said by phone.

Iraq’s south, home to more than three-quarters of its crude output, remained unaffected by fighting between government forces and insurgents from a breakaway al-Qaeda group known as the Islamic State. The country is the second-largest producer in OPEC, data compiled by Bloomberg show.

“The Iraq premium has been erased from the oil price,” said Bob Yawger, director of the futures division at Mizuho Securities USA Inc. in New York. “Prices could rebound if there’s a turn for the worse.”

Brent for August settlement fell 43 cents, or 0.4 percent, to $108.51 a barrel on the London-based ICE Futures Europe exchange. The contract touched $108.27, the lowest level since June 5. It’s erased gains made since early June when Islamic militants seized the northern Iraqi city of Mosul.

The European benchmark grade traded at a $6.10 premium to WTI. The spread dropped to $5.54 at yesterday’s close, the narrowest since June 10.

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