• Wednesday, February 21, 2024
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BusinessDay

US crude in biggest monthly fall since 2008

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US crude posted its biggest monthly drop since the 2008 financial crisis after a string of losses in July triggered by China’s stock market slump and signs that top Middle East producers were pumping crude at record levels.

A higher US oil rig count for a second straight week added to the market’s downside despite a weaker dollar, which would normally support commodities.

Heavy hedging activity in gasoline and diesel futures ahead of front-month contract expiration dominated play on the petroleum complex, diverting some attention from crude.

Oil prices fell for a fifth straight week. US crude settled down $1.40, or almost 3 percent, at $47.32 a barrel. It slid more than 2 percent on the week. Through July, US crude was down 21 percent, its largest monthly decline since October 2008, when oil had an epic collapse at the outbreak of the financial crisis.

Brent settled down $1.10, or 2 percent, at $52.21 a barrel. It lost 5 percent on the week and 18 percent on the month.

The sell-off continued in post-settlement, with both US crude and Brent down more than 3 percent.

July’s oil-price drop was spurred by a stock market tumble in top energy consumer China and growing global oversupply.

The Organization of the Petroleum Exporting Countries, which includes Saudi Arabia and other big Middle East producers, pumped over 32 million barrels per day in July, up 140,000 bpd from June.

Industry firm Baker Hughes, meanwhile, said US drillers added five oil rigs this week on top of 21 last week. Higher rig counts worry the market as they indicate more output. US government data showed production dipped in May before rising again in June.