Oil dips on profit taking after seven-week high
WEB DESK: Oil prices slipped on Thursday as investors cashed in gains from a sharp rally in the previous session, when a surprise fall in US crude stockpiles and concerns over the conflict in Ukraine lifted the market to a seven-week high.
Brent crude futures eased 18 cents, or 0.26 percent, to $69.13 a barrel by 0013 GMT. US West Texas Intermediate (WTI) crude futures were down 20 cents, or 0.31 percent, at $64.79. Both benchmarks had surged about 2.5 percent in the last session.
Profit taking after sharp rally
Market watchers said the pullback was not unexpected. Tony Sycamore, a market analyst at IG, noted that crude had bounced back strongly from the lower end of its recent trading range. “With this in mind, we are likely seeing some light profit taking this morning,” he said.
The rally earlier in the week came after official data showed a surprise draw of 607,000 barrels in US crude inventories for the week ending September 19. Analysts in a Reuters poll had forecast a build of 235,000 barrels.
The Energy Information Administration’s figure contrasted with an industry estimate from the American Petroleum Institute, which pointed to a much steeper 3.8 million-barrel draw.
Ukraine conflict keeps supply risks in focus
Beyond inventory numbers, traders are keeping a close watch on supply risks tied to the war in Ukraine. Kyiv has intensified drone strikes on Russian refineries and export facilities, targeting Moscow’s ability to generate energy revenues. Reports suggest Russia is already facing shortages of certain fuel grades and could restrict exports if the situation worsens.
Despite the disruptions, analysts say oil’s resilience is also due to broader market conditions. Haitong Securities noted that, even as peak demand season tapers off, supply and demand fundamentals have not exerted significant downward pressure on prices.
Adding to that view, J.P. Morgan reported that global oil demand growth so far this year is tracking at 800,000 barrels per day, just shy of the bank’s 830,000 estimate. For September, demand has averaged 104.4 million barrels per day, in line with expectations.
While Thursday’s decline shows investors locking in profits, market sentiment remains underpinned by concerns about supply and a steady outlook for demand.
