Oil Prices retreated from the 2015 highs recorded in the previous session after data from the Organization of Petroleum Exporting Countries, OPEC showed a sudden growth in March output.
Light, sweet crude oil for May delivery slipped 66 cents or 1.2% $55.73 a barrel on the New York Mercantile Exchange.
“On a technical level, Nymex oil prices broke through $55 Wednesday to complete a big technical base and today’s trading is a common retest of the breakout point and old resistance level as new support,” Colin Cieszynski, chief market strategist at CMC Markets, told MarketWatch in emailed comments.
“If that level continues to hold, that could be a bullish sign confirming the breakout and signaling the start of a new recovery trend.”
The US benchmark had risen to its highest since the turn of the year on Wednesday on encouraging output data from the International Energy Agency that showed a decline in the rate of stockpile growth.
Brent Futures, the global benchmark, slipped by 78 cents or 1.2% to $62 a barrel on the London-based ICE futures exchange to retreat on most of the previous session’s gains.
The report by OPEC confirmed expectations by most traders of a jump by about 810,000 barrels a day in March production led by higher production in Saudi Arabia and a partial recovery in Libyan production.
OPEC added that demand for its crude was going to edge slightly higher to 29.5 million barrels a day to help ease the glut. It however added that demand for non-OPEC oil would decline by 165,000 barrels a day and the boom in US supply would end by the end of the year.
“There is some profit taking, but the confirmed OPEC production increase … has to weigh on prices to some degree,” John Kilduff, partner at Again Capital LLC in New York, told Reuters.
Downbeat economic data also pressured oil with US government reports indicating that housing starts grew by less than expected in March while Jobless claims grew slightly higher than expected during the same period.
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