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Looming gasoline glut pulls down crude oil prices

Published 2016-04-04, 08:26 p/m
© Reuters.  Looming gasoline glut pulls down crude oil prices
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* U.S. gasoline demand dips for the first time in 14 months
* Strong gasoline demand has helped support struggling crude
* Traders forced to store unwanted gasoline on tankers in
Asia
* Storage glut could pull prices back to recent lows - BNP
Paribas

By Henning Gloystein
SINGAPORE, April 5 (Reuters) - Crude oil prices fell in
early Asian trading on Tuesday on signs of weakening gasoline
demand, long a pillar of support for struggling fuel markets, in
both North America and Asia.
Front month U.S. West Texas Intermediate (WTI) crude futures
CLc1 were trading at $35.39 per barrel at 0015 GMT, down 30
cents from their last settlement.
International Brent futures LCOc1 were down 23 cents at
$37.46 a barrel.
The declines extended falls from the previous two sessions
as investors doubted that producers will be able to rein in
global overproduction that has seen crude prices tumble by as
much as 70 percent since mid-2014.
Tuesday's declines came after U.S. gasoline demand fell for
the first time in 14 months while oversupply and slowing
economic growth in Asia forced some traders to store unwanted
gasoline aboard tankers as onshore storage facilities in
Singapore and Malaysia are filled to the rims.

Strong gasoline demand has been one of the strongest pillars
of demand in the fuel complex, largely credited for preventing
crude prices from tumbling even further than they did.
With an emerging gasoline glut potentially adding to a
global overhang in crude production that sees over 1 million
barrels produced in excess of demand every day, analysts say
that prices could fall lower again soon.
"Global oil balances will witness sizeable implied inventory
builds in H1'16, suggesting that the price of oil can easily
revisit the lows seen earlier this year," French bank BNP
Paribas said in a note to clients.

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