Pressure's on crude

West Texas Intermediate and Brent crudes fell before U.S. economic data that may signal slowing growth, curbing fuel use in the biggest oil-consuming nation.

Crude in New York slipped for the fourth time in five days amid forecasts that an index of U.S. service industries dropped this month. An upsurge in fighting in Libya hasn’t spread to oil-export terminals and the conflict in Iraq spared the country’s main oil-producing region. WTI (NYMEX:CLQ14) slid last week after government data showed that gasoline (NYMEX:RBQ14) stockpiles rose to a four-month high as demand declined.

“The fundamentals are putting a little pressure on the market,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut. “We have ample supplies and limited demand. The problems in Iraq and Libya don’t appear to have had any major impact on supply.”

WTI for September delivery dropped 79 cents, or 0.8%, to $101.30 at 9:10 a.m. on the New York Mercantile Exchange. The volume of all futures traded was 18% below the 100-day average for the time of day.

Brent (NYMEX:SCQ14) for September settlement dropped 89 cents, or 0.8%, to $107.50 a barrel on the London-based ICE Futures Europe exchange. Volume was 55% lower than the 100-day average. The European benchmark crude traded at a $6.20 premium to WTI, down from $6.30 on July 25.

Economic Reports

A preliminary index of U.S. service industries is forecast to drop to 59.8 for July from 61, a Bloomberg News survey showed before a report from Markit Economics today. The data is scheduled for release at 9:45 a.m. New York time.

The Commerce Department is scheduled to report the nation’s gross domestic product for the second quarter on July 30, while the Labor Department will publish monthly data on non-farm payrolls on Aug. 1.

The Federal Reserve is scheduled to review monetary policy at a two-day meeting starting tomorrow.

Attackers fired at a U.K. diplomatic convoy in Libya a day after the U.S. State Department evacuated its embassy following clashes between militias that highlighted the country’s fragile security. Libya pumped 500,000 barrels of crude a day on July 24, according to the state-run National Oil Corp. The country produced 300,000 barrels a day in June, according to Bloomberg estimates.

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