West Texas Intermediate oil fell for the sixth time in seven days amid forecasts that U.S. refineries reduced operating rates last week, allowing crude supplies at Cushing, Okla., to rebound from near six-year lows.
Refineries probably operated at 92.8 percent of capacity on Aug. 1, down 0.7 percentage point from the prior week, according to a Bloomberg survey before a government report Wednesday.
The announcement last week that a Kansas refinery that gets oil from Cushing may be offline for most of August sent WTI to a four- month low.
Brent slipped on reports that Kurdish fighters in Iraq retook border towns seized by Islamic militants.
“We’re all anxious about tomorrow’s data,” said Bob Yawger, director of the futures division at Mizuho Securities USA Inc. in New York. “WTI has been supported by the fall in Cushing supplies this year. Coffeyville being offline may change the whole formula and we may see a supply gain.”
WTI for September delivery dropped 30 cents to $97.99 a barrel at 9:39 a.m. on the New York Mercantile Exchange. Futures touched $97.09 on Aug. 1, the lowest intraday level since Feb. 5.
The volume of all futures traded was 30 percent below the 100-day average. Prices are little changed this year.
Brent for September settlement slipped 47 cents, or 0.5 percent, to $104.94 a barrel on the London-based ICE Futures Europe exchange.
The European benchmark crude traded at a $6.92 premium to WTI, down from $7.12 Monday.
The Coffeyville plant may remain idle for four weeks after a July 29 fire, said Jack Lipinski, CVR Refining LP chief executive officer, July 31.
The 115,000-barrel-a-day refinery receives most of its crude supply from Cushing, the delivery point for WTI futures.
Supplies at Cushing fell by 924,000 barrels to 17.9 million in the week ended July 25, the lowest level since October 2008, according to an Energy Information Administration report July 30.
Stockpiles at the hub have dropped from a peak of 41.8 million this year as new pipelines have sent oil to the Gulf Coast, home to about half of U.S. refining capacity.
U.S. crude inventories probably fell 1.5 million barrels to 365.9 million last week, according to the median of nine analyst responses in the Bloomberg survey before tomorrow’s EIA report.
The data will show that gasoline supplies fell while stockpiles of distillate fuel, a category that includes diesel and heating oil, gained, the analysts said.
The American Petroleum Institute is scheduled to release separate supply data Tuesday.
The industry-funded group in Washington collects data on a voluntary basis from operators of refineries, bulk terminals and pipelines. The government requires that reports be filed with the EIA.
Kurdish fighters recaptured Sinjar and Rabia’ah near the Syrian border after heavy fighting Monday, according to the Kurdistan Democratic Party.
At least 50 Islamic State militants were killed as security forces battled to regain the village of Wana, south of Mosul dam.
The conflict has spared supply from Iraq’s south, home to more than three-quarters of its crude output.
The nation is the Organization of Petroleum Exporting Countries’ second-largest producer, pumping 3 million barrels a day in July.