Oil price drops to seven-month low

The unexpected massive increase in gasoline stockpiles helped push the oil price down to its lowest point in seven months. Pressure on the price will continue, market strategist tells Bloomberg News.

The oil price remained low Thursday and hovers at a seven-month low.

On Wednesday, futures for a barrel of European reference oil, Brent, for delivery in August plunged 3.5 percent to USD 47.00, and this was virtually the same level Thursday morning CET. The US reference oil WTO noted the same development. The oil price has dropped close to 8 percent in June.

The sliding oil price is attributed to an unusually large increase in gasoline stockpiles, according to a report by the Energy Information Administration, EIA. The gasoline stockpiles increased by 2.1 million barrels, while estimates according to Bloomberg News pointed to a decline.

"Demand is not as strong as expected, and the supplies continue to rise despite a decreasing price," says Chief Market Strategist Michael McCarthy of CMC Markets to Bloomberg News.

He also notes that the downward pressure on the oil price will continue.

English Edit: Daniel Logan Berg-Munch

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