LONDON (Thomson Financial) - Oil dipped to trade just below $123 a barrel on
Thursday following yesterday's fresh record high, with a rebound in the U.S.
dollar calming bullish sentiment.
Prices surged on Wednesday due to concerns over falling distillate
inventories in the United States, continuing the recent run which has seen new
all-time highs posted in each of the last three sessions in New York.
While analysts have pointed to long-term fears that rising demand for crude
could outstrip supplies to explain crude's most recent rally, as well as
short-term concerns over Nigerian supply outages and tight global markets for
diesel and heating oil, the U.S. dollar's rebound has capped gains as
commodities priced in the greenback become relatively more expensive for holders
of other currencies.
"Clearly the current spike in oil prices has been sharp and furious and with
little in the way of fresh impetus and lack of supporting fundamentals a
retracement must surely be on the cards," said Bank of Ireland analyst Paul
Harris. "That said, in current conditions it is difficult to call exactly when
the bearish elements will prevail. More importantly, the key issue is how far
that pullback will be, with oil prices below $100 a barrel at this stage a dim
and distant memory," he added.
At 9:38 a.m., New York-traded West Texas Intermediate crude for June
delivery was down 58 cents to $122.95 a barrel, having yesterday hit a record
high of $123.93 a barrel.
In London, Brent crude for June delivery was down 55 cents at $121.77,
having yesterday touched an all-time record of $122.37.
Wednesday's weekly report of U.S. fuel stocks figures provided the spur for
yesterday's price jump, with distillate stocks declining by 100,000 barrels
against market expectations for a 1.3 million barrel gain.
However, crude and gasoline inventories rose by more than expected, with a
massive 5.7 million barrel rise in crude stockpiles trumping market estimates
for just a 2 million barrel build, weighing on prices.
Gasoline inventories rose by 800,000 barrels, against market expectations
for a fall of 200,000 barrels.
d.sheppard@thomsonreuters.com
ds1/ds1/slm
COPYRIGHT
Copyright Thomson Financial News Limited 2008. All rights reserved.
The copying, republication or redistribution of Thomson Financial News Content,
including by framing or similar means, is expressly prohibited without the prior
written consent of Thomson Financial News.
|