Oil prices fall from 8 week high on correction and profit taking

Oil prices extended their decline as the US market opened on Thursday on correction and profit taking after prices hit an  8 week high earlier in the Asian market. The losses dampened a fall in US crude inventories to a 6 months low, The United States for the first time in a month, which reduced the fears of global supply abundance, and the Kuwaiti government pledged to reduce oil sales during the current year, within the framework of OPEC’s efforts to achieve balance in the market.

By 12:13 GMT, US crude fell to $ 48.35 a barrel from the opening level of $ 48.68 and hit a record high of $ 48.90 since June 1st and a low of $ 48.24.

Brent crude fell to $ 50.60 a barrel from the opening level of $ 50.91 and recorded a high of $ 51.14 and a low of $ 50.49.

US crude oil ended yesterday’s trading up by 0.4 %, and Brent crude rose 0.3 %, the third daily gain, respectively, after the weekly data of the US Energy Information Administration.

On Tuesday, prices rose 4.5 percent, the biggest daily gain since Nov. 30, 2016, after Saudi Arabia’s pledge to cut exports and Nigeria’s approval to join the global production cut agreement.

The US Energy Information Administration announced yesterday that crude inventories in the country fell by 7.2 million barrels for the week ending July 21, and experts forecast a decline of 3.3 million barrels, the fourth consecutive weekly decline.

According to the data, total inventories reached 514 million barrels, the lowest level since the week ended January 13th, in a positive sign of improving demand levels in the world’s largest oil consumer.

In terms of oil production levels, the administration announced last week’s decline of 19,000 barrels per day, the first weekly decline in a month, to a total of 9.41 million barrels per day.

Kuwait has joined Saudi Arabia and has pledged to cut oil sales this year as part of OPEC’s efforts to balance the market.

Riyadh has pledged to cut exports to 6.6 million barrels per day (bpd) in August, about 1 million bpd below export levels during the same period last year

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