Oil Prices Slide to 7-Month Low

Oil futures sagged to their lowest prices since mid-November because U.S. inventories of commercially available crude remain higher than expected.

The price of U.S. benchmark crude closed at $44.73 per barrel, down $1.73. The global benchmark, fell $1.72 to $47.00. Petroleum futures are down 16% this year, defying a production cutback led by the Organization of the Petroleum Exporting Countries aimed at propping up prices.

The U.S. Energy Information Administration says stockpiles of commercially available crude dropped by only 1.7 million barrels in early June. Traders had expected a 2.6 million-barrel decline.

Separately, the Paris-based International Energy Agency reports that global oil supplies climbed by nearly 19 million barrels in April. The agency predicts petroleum demand will expand by 1.4 million barrels per day next year. But it also forecasts that the U.S. supply of crude will rise by 780,000 barrels per day in 2018.

Analysts also expected U.S. gasoline supplies to shrink by 700,000 barrels last week. But EIA says stockpiles rose by 2.1 million barrels, an unusual occurrence at the beginning of the summer driving season. The increase could translate into cheaper fuel prices this summer. Observers blame sagging demand, due in part to the steadily improving average fuel economy of the nation’s fleet.