AP FILE PHOTO
NEW YORK, United States—The oil market took a cautious breather Thursday after three days of gains raised hopes that the ravaged market had finally found a floor.
In New York, West Texas Intermediate for April lost nine cents at $34.57 a barrel.
In London trade, Brent crude for May delivery edged up 14 cents to $37.07 a barrel, its best level since early January.
Both contracts rose over the past three days amid hopeful signs of a tighter market—slowly falling US production and talk among Russia and OPEC members of holding a meeting this month to agree a cap on output.
But because any meeting—and it has not yet been set—would not lower output, and because crude stockpiles continue to mount in the United States and elsewhere, analysts said the new price levels remained frail.
For one, US commercial stockpiles added a huge 10.4 million barrels last week, according to the government’s weekly assessment on Wednesday.
“After yesterday’s US inventory report, there hasn’t been much news or it’s been very weak. Maybe people are starting to think we’ve found a bottom, but evidence is not really strong,” said Mike Lynch of Strategic Energy & Economic Research.
Crude, which in late January was wallowing near 13-year lows below $30 a barrel, has steadily picked up recently as dealers are buoyed by the fact there are talks by top producers on the market glut.
But analysts doubt it will have much effect in the near term on prices.
“On the balance of probability, it’s going to be very hard for OPEC to do much more than, say, freeze production at current levels or agree to that, which won’t have much impact on the current market,” CMC Markets analyst Ric Spooner told AFP.
RELATED STORIES
Oil prices fall ahead of US inventory data
Oil prices fall as conditional ‘freeze’ deal disappoints