More Downside For Crude Oil

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West Texas Intermediate fell for a second day, extending the biggest loss in more than a month as U.S. crude output surged to a 22-year high. READ

West Texas Intermediate fell for the second day in three after fluctuating amid data showing a slowdown in China’s manufacturing in July and shrinkage in crude stockpiles in the U.S., the world’s largest oil consumer. READ

In addition to pushing the WTI market into backwardation, these developments are helping to raise Midcontinent spot prices, narrowing the spreads between North Sea Brent and WTI and between Bakken and Light Louisiana Sweet (LLS) crude oils. However, the resumption of syncrude imports and an anticipated refinery switch by BP Whiting to heavier Canadian crude later this year could take upward pressure off prompt WTI prices, flattening the forward curve. LINK

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