Oil prices fall as US ouput remains at record highs

Oil prices fell Wednesday as the weekly US industry report showed domestic output still high and commercial fuel inventories generous.

In New York US benchmark West Texas Intermediate for August delivery lost 74 cents at $60.27 a barrel in NYMEX trade.

In London Brent crude for August dropped 96 cents to $63.49 a barrel.

The weekly official US oil report showed domestic crude output edged up to a record 9.6 million barrels a day in the week to June 19, and that crude stockpiles, though down 4.9 million barrels in the week, were still at a near-record 463 million barrels.

Nothing in the data suggested that the US oil industry, as the country enters the summer holiday driving season, was cutting back in the face of low prices.

“While the draw in crude was sizable, the build in gasoline inventories has more than offset it,” noted analyst John Kilduff of Again Capital.

“Gasoline is the focus at this time of year, and those supplies are plentiful. Refineries are obviously cranking out high volumes of gasoline… in the face of already strong demand.”

Oil prices nevertheless remained in the same range of the past two months or more, on hold for signs of a demand pickup or cutbacks by major producers, neither of which has happened.

Traders also have their attention focused on the Iran nuclear talks, with six days to go for the country and major powers to reach a deal on reining in the country’s nuclear program that would allow the lifting of controls on its oil exports.