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Crude slides further as weak gas demand stokes fears

Pump jacks and wells are seen in an oil field on the Monterey Shale formation where gas and oil extraction using hydraulic fracturing, or fracking, is on the verge of a boom, March 23, 2014 near McKittrick, California.
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Pump jacks and wells are seen in an oil field on the Monterey Shale formation where gas and oil extraction using hydraulic fracturing, or fracking, is on the verge of a boom, March 23, 2014 near McKittrick, California.

U.S. crude shed more than $1 and Brent fell on Wednesday, as a rise in U.S. gasoline inventories signaled weak demand, and a restart of a Libyan oilfield helped ease supply worries.

Gasoline stockpiles rose 579,000 barrels, data from the Energy Information Administration showed on Wednesday, compared with analysts' expectations in a Reuters poll for a 217,000-barrel drop.

Libya has restarted the 340,000-barrel-per-day (bpd) El Sharara field after protesters ended a four-month strike, which could double the country's current crude output. The government has also taken back control of the Ras Lanuf and Es Sider oil ports, ending an almost year-long occupation that reduced Libya's output to less than a quarter of the 1.4 million bpd it was pumping before protests began last summer.

Brent crude fell 70 cents to hit a new one-month low near $108 a barrel, the weakest since June 9, and down about 6 percent from a nine-month top hit in June.

U.S. crude dropped $1.11 to $102.29 a barrel, after Tuesday's settlement marked its longest losing run since 2009.

The international contract is on course to fall for an eighth straight session in what would be its longest losing streak since May 2010. The August contract is now trading at a discount of about 16 cents to the September contract.


Fund managers and traders rushed into Brent when Islamic militants rampaged across Iraq in June, pushing the benchmark to a 9-month high of $115.71. To date, the violence has had a very limited impact on crude exports and now many are taking profits. At the same time there is low demand for crude oil from European refiners, which have been struggling with weak margins because of an influx of diesel from the United States, Russia and Asia.

--By Reuters. For more information on commodities, please click here.

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