Brent On Track For Largest Monthly Loss In Over A Year

Brent crude oil looked poised to post its largest monthly loss in more than a year on Thursday as it traded at $105.72 at 7:45 GMT.

The commodity was under pressure as data indicated that global supply may be far surpassing demand.

On Wednesday, the Energy Information Administration reported that U.S. crude inventories declined by an unexpected 3.7 million barrels last week, far surpassing analysts’ forecasts for a 1.5 million barrel drop.

However, gasoline stocks increased by 365,000 barrels, a worrying sign for some as the nation is in the middle of its peak driving season. The figure raised concern that the number one oil consuming nation’s appetite could be declining.

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Also weighing on Brent prices was a Reuters survey which showed that OPEC’s output had risen from June to July despite several conflicts in OPEC supplying nations. In July, the organization averaged 30.06 million barrels per day, compared to June’s daily average of 29.92 million barrels per day. The rise was largely attributed to an increase in supply from Libya, where several oil ports had been closed for months due to protests.

A better than expected U.S. GDP figure also hurt Brent prices despite the fact that it was a sign of a healthy economy.

The U.S. economy expanded four percent in the second quarter, proving that the nation’s first quarter decline was a fluke. However, the data boosted the greenback, which weighed on commodities priced in dollars.

Moving forward, investors will be watching for any new developments in Russia, where new sanctions from the U.S. and the EU may depress the nation’s oil exports.

Instability in Gaza and Iraq could also play into Brent prices if there are any major developments.