Oil price falls from 2016 high

Oil prices fell Thursday on profit-taking, after New York crude reached the highest level this year on signs that the global supply glut was easing.

In early trading, New York’s benchmark contract reached $47.02 a barrel — a highest point since early November.

Later around 1630 GMT and after traders booked profits, New York’s West Texas Intermediate for delivery in June stood at $45.98 a barrel, down 25 cents compared with Wednesday’s close.

Brent North Sea crude for July dropped 46 cents to $47.14 a barrel.

Prices had rallied earlier in the day, as the International Energy Agency forecast a sharp drop in the supply glut, and following a surprise fall in US crude reserves.

Energy advisory group the IEA forecast that the stubborn oil glut will “shrink dramatically” this year, following wildfires that have disrupted Canada’s output and on buoyant Indian demand, analysts said.

The IEA’s monthly report was published one day after news of a drawdown in US oil inventories that signalled strong demand in the world’s top oil consumer — and sent prices racing higher.

The “surprise draw (fall) in US crude oil inventories was very supportive for crude futures”, Sucden brokers analyst Kash Kamal told AFP.

The oil market has been rocked by chronic oversupply in recent years, badly hurting producers but translating into lower prices at the petrol pumps for consumers.

Despite this week’s gains, the market remains far below the $100-a-barrel mark of mid-2014 — and sank underneath $30 earlier this year on the back of abundant supplies.

In Canada, recent devastating wildfires forced a shutdown of 1.2 million oil barrels a day.

Crude futures had meanwhile already surged on Wednesday after the US government’s Department of Energy said inventories slid 3.4 million barrels last week. That confounded market expectations for an increase.

The DoE report showed also that US oil production had fallen, while supplies of gasoline (petrol) and distillates, such as diesel and heating fuel, slid by more than expected.

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