Oil pressured by gasoline inventories

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IOL pic july7 oil barrels colourful . .

Tokyo - Oil prices were mixed in Asia on Friday as soft gasoline demand in the United States offset upbeat manufacturing data from China, analysts said.

The US benchmark, West Texas Intermediate (WTI) for September delivery, dipped 11 cents to $101.96 a barrel in late-morning trade, while Brent crude gained three cents to $107.10.

“WTI prices are kept pressured under by gasoline inventories, which expanded for the third straight week despite the ongoing driving season in the US,” said Desmond Chua, market analyst at CMC Markets in Singapore.

“Meanwhile the slide in Brent has been kept in check due to the possibilities of tougher sanctions against Russia, which may spark an oil crunch in Europe,” he told AFP.

US gasoline inventories rose 3.38 million barrels to 217.9 million in the week ended July 18, according to the Energy Information Administration, even though the driving season when Americans take to the road for their holidays is in full swing.

However, hopes for a pick-up in demand were boosted by HSBC's preliminary purchasing managers index of Chinese manufacturing activity, which leapt to an 18-month high of 52.0in July, a further sign the world's second-largest economy is gaining momentum. China is the world's top energy consuming nation.

Investors are also keeping an eye on events in eastern Europe as the US and its allies plan another round of sanctions on Russia for its support of rebels accused of shooting down a Malaysian Airlines jet last Thursday.

While tensions have eased over the past week since the rebels handed over the plane's black boxes Washington is still pressing ahead with stiffer measures against Moscow.

However, Ukraine is a major conduit for Russian natural gas exports to Europe, and there are concerns the sanctions could disrupt supplies.

An EU source said Thursday that the European Union will add to its sanctions list 15 Ukrainian and Russian individuals and 18 entities over their role in the Ukraine crisis. - AFP


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