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Oil prices dive as basic oversupply comes to fore
[NEW YORK] Oil prices dived on Thursday a day after hitting 2015 highs as worries about global oversupply reemerged as traders scrutinized a mixed US inventories report.
US benchmark West Texas Intermediate (WTI) for June delivery shed US$1.99 to finish at US$58.94 a barrel on the New York Mercantile Exchange.
Brent North Sea crude for June, the European benchmark, tumbled to US$65.54 a barrel in London, down US$2.23 from Wednesday's close.
WTI and Brent had rallied to their highest levels of the year on Wednesday after the US Department of Energy unexpectedly reported the first drop in US crude-oil stockpiles in four months.
Crude stockpiles tumbled by 3.9 million barrels last week, but at 487.0 million barrels were still at their highest level on record for this time of year.
"Yesterday's report, other than the headline crude number, was actually very, very bearish," said Kyle Cooper at IAF Advisors.
Mr Cooper noted that the decline in crude stockpiles was largely due to a weaker level of imports, not because of the slight drop in US production.
"We built 40 millions barrels during the last few weeks and prices rose 20 bucks," he said. "This price rise did not correspond to an actual improvement in the fundamentals."