SULAIMANI (ESTA) — Oil prices fell on Thursday, giving up some of the recent strong gains on profit-taking and speculation that the market’s strength could tempt producers like Saudi Arabia to reduce output by less.
Brent crude fell 38 cents to $61.09 a barrel at 0652 GMT, after touching its highest since January 2020 on Wednesday. U.S. crude futures slid 35 cents to $58.33 a barrel.
Crude stocks last week fell for a third straight week, dropping 6.6 million barrels to 469 million barrels, according to the Energy Information Administration.
Reuters cited some analysts as saying that process have moved too far ahead, and could tempt producers to open their taps a bit more.
“Despite finding support for the large draw in the U.S. crude stockpiles… oil prices couldn’t hold into its gains possibly on the expectation that Saudi Arabia could roll back their unilateral Feb/Mar production cuts and that OPEC could signal more production coming back online at the March meeting given the sizzling recovery in oil prices,” said Stephen Innes, chief global markets strategist at Brokerage Axi, according to Reuters.
Crude has jumped since November as governments kicked off vaccination drives for COVID-19 while putting in place large stimulus packages to boost economic activity, and the world’s top producers kept a lid on supply.
Saudi Arabia is unilaterally reducing supply in February and March, supplementing cuts agreed by other members of the Organization of the Petroleum Exporting Countries (OPEC) and allies, known as OPEC+.
