Oil prices fell from their four month highs on Friday weighed down by reports that Iraq had raised its crude exports to a 30 year high as OPEC output stood at its highest since 2012.
Prices remained off Thursday’s gains for most of the day but still remained on track for a weekly gain despite 6the Spokesperson of the Iraqi oil Ministry saying that its oil exports rose to record levels in April.
Iraq’s production keeps the total output by the Organization of Petroleum Exporting countries well above 30 million barrels per day and well above the global demand for their oil.
Oil recorded its biggest monthly gain in more than 25 years spurred by a drop in the number of operational rigs in the US. Crude stockpiles, however, remain at an 85 year high fuelling speculation that the rally was short-lived.
“Iraq continues to export at a record pace and it’s definitely having an impact on the market,” Phil Flynn, senior market analyst at the Price Futures Group in Chicago, told Bloomberg.
“There seems to be some profit-taking after a great run in April.”
Light sweet crude for June delivery fell by 92 cents or 1.5% to $58.71 a barrel on the New York Mercantile Exchange.
The US benchmark gained more than 25% in April after jumping more than 3% on Friday to its 2015 highs on bets that the global glut would ease.
Brent for June delivery, the global benchmark, fell by 83 cents or 1.2% to $65.95 a barrel on the London Based ICE futures Exchange.
The global benchmark ended April on a 25% high and remained on track for a 1% weekly gain despite Friday’s selloff.
A weaker dollar also helped fuel Thursday’s rally with a weaker dollar bullish for dollar denominated commodities like Oil.
“For oil, the path of least resistance remains higher from here as the bulls have some momentum and the short side of the market remains overcrowded, leaving futures vulnerable to swift short-squeeze rallies,” Tyler Richey, an analyst for the 7:00’s Report, told Market Watch.
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