Oil prices drop as profit-taking sets in

LONDON - World oil prices fell on Thursday on profit-taking after surging by almost four dollars the previous day on news that stockpiles of US motor fuel were tightening, traders said.

By (AFP)

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Published: Thu 3 Apr 2008, 8:03 PM

Last updated: Sun 5 Apr 2015, 11:35 AM

New York’s main oil contract, light sweet crude for delivery in May, lost 77 cents to 102.98 dollars per barrel.

London’s Brent North Sea crude for May shed 64 cents to 104.19 dollars per barrel.

Crude futures had rocketed on Wednesday after the US government’s Energy Information Administration said that American gasoline or petrol reserves tumbled by 4.5 million barrels last week. Market expectations had been for a lighter drop of 2.5 million barrels.

At the same time, however, the EIA said US crude inventories had surged by 7.4 million barrels in the week ending March 28. The gain smashed analysts’ consensus forecast for a gain of 2.25 million barrels.

“Crude futures were down (on Thursday), coming off after last night’s robust gains as investors were still digesting an ambiguous report on US fuel stocks,” said Sucden analyst Andrey Kryuchenkov.

“It seems that this draw in gasoline stockpiles overshadowed a massive surge in crude inventories.”

The market is beginning to closely watch gasoline inventories ahead of the peak demand season for motor fuel in the United States which begins in May when Americans begin their summer vacations.

Traders also fretted on Thursday over recent comments from US Federal Reserve chairman Ben Bernanke, who has warned that the US economy could slide into a possible recession during the first half of 2008.

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