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Oil prices slide on profit-taking, but supply risks support
[SINGAPORE] Oil prices slipped in thin trading on Wednesday as investors took profits from the previous session's rally, while potential supply disruptions in the United States, Brazil and Libya curbed losses.
Brent futures for December delivery had fallen 4 US cents to US$50.50 at barrel by 0215 GMT, after ending the last session up US$1.75, or 3.6 per cent.
US crude for December delivery dropped 2 US cents to US$47.88 a barrel, after closing up US$1.76, or 3.8 per cent. Earlier on Wednesday, it hit its highest since Oct 13 at US$48.36. "(Investors are) taking short-term positions after a good rally," said Michael McCarthy, chief market strategist at Sydney's CMC Markets.
Prices were expected to slide further later in the day although they will remain range-bound, McCarthy added. "A year-end recovery in commodity prices remains unlikely with a stronger dollar and continued weak Chinese economic data," ANZ said in a research note on Wednesday.
While there were no major supply disruptions, a strike at Brazil's state-run oil producer Petroleo Brasileiro SA and the closure of the Libyan oil export terminal at Zueitina provided some support to prices, McCarthy said.
The Petrobras strike, which has slowed daily oil output by around 25 per cent in the world's ninth biggest oil producer, helped fuel the rally in prices in the previous session.
But a likely build in US crude inventories last week weighed on sentiment.
Crude stocks rose by an estimated 2.8 million barrels in the week to Oct 30 to 479.9 million, data from industry group the American Petroleum Institute showed on Tuesday.
Official inventory data from the US Department of Energy's Energy Information Administration will be released later on Wednesday. (EIA/S) Investors are also keeping an eye on manufacturing data from China, Japan and the eurozone later on Wednesday.