PBA ReporterOil prices have dropped after rising to seven-year highs as an increase in US crude and fuel stockpiles prompted investors to take profits from the rally.
Prime Business Africa gathered that Brent crude futures over the weekend dropped $2.46, or 2.8%, to $85.92 a barrel by 0136 GMT.
It was learnt that the contract earlier fell by as much as 3%, the most since Dec. 20. The global benchmark touched $89.50 a barrel on Thursday, its highest since October 2014.
Join our WhatsApp ChannelThe recent rally in crude prices appeared to run out of steam on Thursday when Brent and WTI ended the trading session with slim losses. Both benchmarks have gained more than 10% so far this year amid concerns over tight supply.
Speaking on the occurrence, Hiroyuki Kikukawa, general manager of research at Nissan Securities, said: “Investors made short-term adjustments in their positions after an increase in U.S. inventory and ahead of the weekend.”
Reports claimed that gasoline inventories in the United States, the world’s biggest oil consumer, rose by 5.9 million barrels, to their highest since February 2021, according to the U.S. Energy Information Administration (EIA). Crude stockpiles rose by 515,000 barrels last week, against industry expectations.
The EIA also reported a slight decline in refinery runs, indicating lower demand for crude.
“Slumping stock markets amid concerns that the Federal Reserve may aggressively move to raise rates this year also weighed on sentiment”, said Chiyoki Chen, chief analyst at Sunward Trading.
This Newspaper also gathered that oil supply concerns mounted last week after Yemen’s Houthi group attacked the United Arab Emirates, OPEC’s third-largest producer, while Russia, the world’s second-largest oil producer, has built up a large troop presence near Ukraine’s border, stoking fears of invasion.
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