Oil Slips to $108 on Slack US Demand

Oil fell towards $108 a barrel on Thursday, extending its longest losing streak in four years, under pressure from weak gasoline demand in the United States and the prospect of rising supply from Libya.

Data showed an increase in U.S. gasoline inventories last week, indicating demand was not as strong as expected during the peak summer driving season.

Brent crude was down 26 cents at $108.02 a barrel by 1341 GMT, down for a ninth straight session and matching a similar losing run in May 2010. It hit a low of $107.76 earlier in the day, the weakest price since May 9.

U.S. crude was down for a 10th session at $102.03 a barrel, 26 cents below Wednesday's close. The front-month price is set to post its longest stretch of losses since July 1984.

Concern over supply disruptions in Iraq have eased as exports from southern Basra continued during the Islamist insurgency.

Libya's output has risen to 350,000 bpd due to an increase in production from El Sharara. The oilfield, which has recently restarted, was producing 90,000 bpd.

"It's a combination of profit-taking, the Libya effect and I would say a slight reduction in the risk premium regarding the Iraq situation," said Hans van Cleef, a senior energy economist at ABN Amro in Amsterdam.

He added it would not be surprising to see Brent crude fall to $105 a barrel in the coming months.


China Growth
China, the world's second-largest oil consumer, posted a 10.2 percent rise in crude imports in the first six months this year, customs data showed on Thursday. Analysts attributed the jump in imports to stockpiling.

The International Energy Agency forecast in June that China's total oil demand would rise by 355,000 barrels per day (bpd), or 3.5 percent, for the whole of 2014.

Investors expect Beijing to implement more stimulus measures to support growth, which could lift its fuel demand.

OPEC expects its share of the world oil market to shrink in 2015 for the third year running, despite an increase in global demand. Its oil demand next year will average 29.37 million bpd, down 310,000 bpd from 2014, according to a monthly report.

Fuel demand in the United States, however, has been a let-down despite a gradual recovery in the world's largest economy.

"We expect gasoline demand to pick up, but so far it has not surpassed late-May or early-June levels," Societe Generale (SGE.SG)'s Michael Wittner said in a note.

Gasoline demand over the past four weeks was at 9.04 million bpd, down 0.4 percent from a year earlier, data from the Energy Information Administration showed on Wednesday.

Stockpiles of the motor fuel rose by 579,000 barrels, compared with analysts' expectations in a Reuters poll for a 217,000-barrel drop. Crude inventories fell 2.4 million barrels in the week to July 4, slightly more than analysts' expectations for a decrease of 2.2 million barrels.

(By Simon Falush and Rowena Caine, Additional reporting by Florence Tan and Theodora Cruz in Singapore; Editing by Jane Baird and David Evans)