Oil prices fall again following transitory rise a day before
Oil prices have edged down after another rise that came on the back of the first drop in US stockpiles for six months as well as a weaker dollar.
According to a Friday report by AFP, US benchmark West Texas Intermediate (WTI) for June delivery fell three cents to USD 59.60 a barrel, while Brent for June eased 18 cents to USD 66.60. However, trading was generally quiet as most Asian markets were closed for public holidays.
On Thursday trading, WTI jumped USD 1.05 and Brent gained 94 cents. The contracts for both varieties of crude rose by about one-fifth through April owing to several factors, including concerns about unrest in Yemen, the weakening dollar and fewer US rigs in operation to produce more crude oil.
In general, however, prices still remain well down after plunging almost 60 percent between June and January as a result of a global supply glut and ramped up production.
Thursday jump in prices came after a report was released by US Department of Energy on Wednesday, which showed a 500,000-barrel drop in petroleum stocks to 61.7 million barrels at the key Cushing, Oklahoma trading hub. Though the decline was modest, it marked the first drop since late November.
Traders took the decline as a sign that producers are cutting back at key US petroleum sites, such as the Bakken region in North Dakota, analysts said.
“The market appears to be happy enough with steady production levels and the reduction in inventory,” Ric Spooner, a chief strategist at CMC Markets in Sydney, told Bloomberg News.
He added, “It’s likely that the gains that we’ve seen might be getting close to an end point. Oil will probably find it difficult to sustain values much beyond the mid-$60s.”