Oil prices drop on high supplies

31st March 2016, Comments 0 comments

Oil prices fell on Thursday as a smaller-than-expected increase in US stockpiles failed to stem worries about a global supply glut.

The US Department of Energy on Wednesday reported another rise in US commercial crude stockpiles last week, by 2.3 million barrels.

While the increase was lower than analysts' estimates of about three million barrels, it still pushed inventories to fresh record highs, in a market already brimming with supplies.

At around 1020 GMT, US benchmark West Texas Intermediate for delivery in May was down 47 cents at $37.85 a barrel.

Brent North Sea crude for May delivery dipped three cents to $39.23 a barrel compared with Wednesday's close.

Prices have been easing since the middle of last week, suggesting that a prior rally from near 13-year lows may have run its course.

Traders had been moving back into oil thanks to a weaker dollar and hopes an upcoming meeting of major oil producers could result in measures to tackle excess supplies.

Margaret Yang, an analyst at CMC Markets, said oil was coming under pressure since "hopes and expectations of an OPEC production freeze have been priced-in".

She noted also that "oil inventories are still building and demand is weak".

© 2016 AFP

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