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Profit taking leaves oil flat after week's strong rally
[NEW YORK] Oil edged up in New York and slipped in London as traders booked profits Friday from the week's rally fueled by hopes for oversupply relief from lower US crude production.
US benchmark West Texas Intermediate (WTI) for delivery in November rose 20 cents to US$49.63 a barrel on the New York Mercantile Exchange.
Brent North Sea crude for delivery in November, the global benchmark, fell to US$52.65 a barrel in London, a loss of 40 cents from Thursday's settlement.
The US futures contract had been moving higher above US$50 for much of the day before momentum petered out on the Nymex.
"We're just seeing a bit of profit taking at the end of a very, very strong week here," said Matt Smith of ClipperData.
"After quite a strong rally in the last few days, we're running into resistance just at this US$50 level."
WTI prices, which stabilised around US$45 in September after hitting six-year lows, have been rebounding this month and leaped 9.0 per cent over the past five days of trade, while Brent gained 9.4 per cent.
There was a fresh sign pointing to a brighter outlook for the oversupplied market - another drop in US exploration activity, according to the Baker Hughes weekly US oil rig count.
The number of active rigs fell by nine last week, marking the sixth consecutive weak of declines in the closely watched data.
The drilling slowdown appeared to underpin the Department of Energy's report this week of a decline in US crude production in September.
"Market sentiment has changed given that we continue to see a decline in the US production and the forecast is for this decline to continue into 2016," said Andy Lipow of Lipow Oil Associates.