Oil prices fell by more than $1 a barrel yesterday, bringing the decline in crude futures to more than $4 a barrel in the past three days...
VIENNA, Austria — Oil prices fell by more than $1 a barrel yesterday, bringing the decline in crude futures to more than $4 a barrel in the past three days.
Brokers attributed the drop to profit-taking at the end of the second quarter, rising U.S. supplies of oil and related products and solid refinery output.
After falling as low as $55.90, light sweet crude for August delivery settled 76 cents lower at $56.50 a barrel on the New York Mercantile Exchange. The Nymex contract has been sliding since Monday’s record close of $60.54 a barrel.
“What started the decline from Monday’s high was profit-taking, as hedge funds wanted to book profits ahead of the second quarter,” said Victor Shum, an oil analyst at Texas-based energy consultants Purvin & Gertz in Singapore.
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On Wednesday, the U.S. Energy Department’s statistical arm said inventories of crude oil increased by 1.1 million barrels to 328.5 million barrels, 8 percent above year-ago levels.
Refinery utilization also increased to 96.3 percent of capacity, up from 94.8 percent the week before, and that appeared to give a lift to the fuel supply. Gasoline inventories grew by 300,000 barrels to 216.2 million barrels, or 4 percent above year-ago levels, the government said.
Vienna’s PVM Oil Associates said the U.S. data “sent an almost unequivocally bearish signal,” adding: “Another reason behind slipping oil prices this week might be simple end-of-quarter profit-taking.”
Crude-oil futures are more than 50 percent above year-ago levels but would have to top $90 to reach the inflation-adjusted high set in 1980.
The Organization of Petroleum Exporting Countries (OPEC), which supplies about 35 percent of the world’s daily consumption of 84 million barrels, has sought to prices by raising production, but the market has largely ignored its moves.
Venezuela’s oil minister said Wednesday that OPEC didn’t have much excess production capacity and that the main reasons for high oil prices were speculation by investors and limited refining capacity.