Oil prices slipped in Asia today as traders took profits from gains fuelled by a bigger-than-expected drop in US crude inventories, analysts said.
New York’s main contract, West Texas Intermediate (WTI) light sweet crude for delivery in August, was down 25 cents at $106.27 a barrel in the morning trade. Brent North Sea crude for August delivery shed 32 cents to $108.19.
WTI crude had leaped $2.99 in late New York trade yesterday, as the market cheered the US Energy Information Administration’s (EIA) weekly crude stockpiles data, which indicated a pick-up in demand in the world’s biggest economy.
Brent rose 70 cents in London trade yesterday.
“Traders have paused to take stock following the huge overnight gains over the EIA data,” David Lennox, resource analyst at Fat Prophets in Sydney, said.
“This is prime US driving season, and the inventory drawdown indicates a healthy pick-up in demand,” he said.
The EIA data released yesterday showed US crude stockpiles tumbled by 9.9 million barrels in the week ended July 5.
That was more than triple the 2.9-million-barrel drop expected by most analysts polled by Dow Jones Newswires, and followed the prior week’s drop of nearly 10 million barrels.
Despite the sell-off in Asian trading hours, analysts said that oil prices were also supported by Federal Reserve Chairman Ben Bernanke’s comments that the US central bank’s economic stimulus measures were still necessary.
“There is an upbeat sentiment from his comments that the US Fed will continue to pursue an accommodative monetary policy,” said Desmond Chua, market analyst at CMC Markets in Singapore.