London – World oil prices pulled back in volatile trading on Thursday despite a surprisingly upbeat US supply report a day earlier, analysts said.
Brent North Sea crude for June delivery hit a four-month high at $63.29 a barrel, but later stood at $63.15 nearing midday, down 17 cents from Wednesday.
US benchmark West Texas Intermediate for delivery in May sank 13c to $56.26 a barrel.
Crude futures had rallied sharply on Wednesday after the US government’s Department of Energy (DoE) said commercial crude inventories rose by 1.29 million barrels in the week to April 10, much lower than the surge expected by analysts.
Rises in US reserves are indicative of slack demand in the world’s top crude consumer.
“Rising oil inventories are usually bearish as it indicates that there is lot of black stuff around,” said PVM analysts in a note to clients.
“It is, however, not the case when US crude oil inventories build by the smallest margin so far this year.
“Throw in that crude oil stocks in the US West Coast jumped by 1.4 million barrels and all of the sudden you have bullish data,” they added.
The DoE also said US oil production fell by 20 000 barrels, or 0.2%, to 9.38 million barrels per day, in the week ending April 10.
Analysts said the decline should help ease the global crude oversupply, which led to a collapse in prices of more than 50% between June and January.
The Paris-based International Energy Agency (IEA) on Wednesday cut its supply forecast for non-Opec countries, citing a lower outlook for US and Canadian output and the “worsening conflict” in Yemen.
The agency also bumped up by 90 000 barrels per day its forecast for 2015 petroleum demand. The IEA now expects 2015 consumption of 93.6 million barrels per day, up 1.1 million barrels per day for the year.
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