Oil drops on profit-taking after US reserves fall

AFP FILE PHOTO

NEW YORK, United States—World oil prices slid Thursday after rallying sharply the previous session following the first drop in US petroleum inventories in seven weeks.

US benchmark West Texas Intermediate for May delivery lost 49 cents at $37.26 a barrel on the New York Mercantile Exchange.

Brent North Sea oil for June delivery shed 41 cents at $39.43 a barrel in London.

Oil prices had risen more than five percent Wednesday after the US reported that commercial crude inventories fell 4.9 million barrels in the week ending April 1.

But that set the stage for profit-taking on Thursday, especially since the oil market is still viewed as glutted, analysts said.

“The petroleum markets have turned lower on profit-taking off Wednesday’s rally, as traders recognize that the one-week decline in US crude oil inventories may not have signaled any change in the wider market,” said Citi Futures analyst Tim Evans.

James Williams of WTRG Economics said the oil market will probably trade in a rocky fashion ahead of an April 17 meeting in Qatar of oil producers to discuss capping  production.

“Between now and the Doha meeting, we’re going to see the market up and down a lot depending on which member of OPEC says what,” he said.

RELATED STORIES

Oil prices extend gains on US inventory data

Oil up as Kuwait revives hope for output freeze deal