OREANDA-NEWS. August 19, 2013. The Brent price declined with upbeat oil import figures from China failing to offset concerns about prospects of the US Federal Reserve scaling back its quantitative easing programme.

West Texas Intermediate (WTI) also lost ground although a government report pointed to a decline in US crude inventories. The natural gas price inched lower ahead of weekly storage data.

Brent Price under Pressure

Brent futures for September delivery shed 0.59 percent to trade at USD106.81 per barrel as of 13:39 BST. The Brent oil price lost ground even as figures from the General Administration of Customs in Beijing showed that total exports from China, the world’s second-largest oil consumer, rose 5.1 percent last month, whereas crude oil imports hit a record 6.15 million barrels per day.

As Reuters noted, market participants focused on the prospects of the Fed withdrawing its monetary stimulus as early as next month, seen as reducing liquidity on global markets. The oil price was also dragged down by easing tension between the US and Iran whose new president has signalled willingness to negotiate over Teheran’s nuclear programme.

WTI Price Soft after EIA Report

WTI futures for September delivery shed 0.59 percent to trade at USD 103.75. Yesterday, the US Energy Information Administration (EIA) reported that crude inventories declined by 1.32 million barrels last week. In addition, oil supplies at Cushing, Oklahoma, the delivery point of WTI futures and the largest storage hub in the US, fell by 2.2 million barrels to 39.9 million barrels.

“Oil prices have found themselves unable to profit from either the sharp fall in US crude oil stocks or the very robust Chinese import figures,” Commerzbank noted, as quoted by Reuters. “This should be interpreted as a negative sign and suggests that we will see further price falls in the coming days.” Bloomberg quoted David Lennox, a resource analyst at Fat Prophets, as noting that the EIA numbers were “a little mixed”.

“Good numbers from China will at least stop the crude price from falling,” Lennox added. The EIA said that refineries operated at an average 90.9 percent of capacity last week, down 0.4 percentage points from the previous week.

Natural Gas Price Update

Natural gas futures for September delivery shed 0.37 percent to trade at USD 3.24 per million British thermal units on the NYMEX as of 14:15 BST. Yesterday, the contract declined for the fifth consecutive day and closed 2.1 percent lower, dragged down by forecasts of persisting mild weather in the US Northeast and Midwest, seen as curbing energy demand with fewer people using air conditioners.

Reuters quoted Commodity Weather Group as forecasting yesterday that while Texas and the Southwest were likely to remain fairly hot next week, a seasonal to cool pattern was expected to continue in the East and Midwest for most of the next two weeks.

Today, investors are waiting for the weekly EIA report on inventories. Reuters-polled analysts and traders expect an increase of 77 billion cubic feet last week, well above the five-year average increase of 42 billion cubic feet for that week.