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Oil prices retreat from US$50 a barrel

Friday, July 1, 2016 - 06:55
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Oil prices fell sharply on Thursday, backing away from US$50 a barrel on profit-taking and diminishing worries about supply disruptions in Nigeria and Norway.

[NEW YORK] Oil prices fell sharply on Thursday, backing away from US$50 a barrel on profit-taking and diminishing worries about supply disruptions in Nigeria and Norway.

Analysts said some oil traders cashed out following a two-day rally on Tuesday and Wednesday that followed a big drop in oil prices after Britain's vote to leave the European Union.

Oil was also depressed by gains in the dollar after Bank of England governor Mark Carney signaled likely monetary stimulus this summer due to the economic hit from Brexit. A stronger dollar weakens demand for oil and commodities that are sold in the US currency on international markets.

"After a couple of days of rampant rallying, crude is heading lower once more amid a stronger dollar," said ClipperData analyst Matt Smith.

US benchmark West Texas Intermediate for delivery in August dropped US$1.55 to US$48.33 a barrel on the New York Mercantile Exchange.

Brent North Sea oil for August delivery fell 93 cents to US$49.68 a barrel in London.

Analysts also pointed to lessening fears about an oilfield strike in Norway and to the expectations of higher production in Nigeria.

Goldman Sachs cited an announcement by the Nigerian government of a 30-day ceasefire on oilfield attacks. Such attacks have sharply hit oil production in the African oil exporters.

"A normalization in production, even over several more months, would create downside risk" for oil prices, Goldman said.

AFP

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