Crude oil futures put an end to the three-session winning streak on Nymex, which had lifted the prices by more than 9% as investors shifted their focus to the increasing US inventories.
Prices continued to drop after minutes from the Federal Reserve’s policy meeting of January showed that the central bank officials were not in a hurry to raise interest rates.
On the New York Mercantile Exchange, March crude dropped 2.6% or $1.39 to settle at $52.14 per barrel, as reported by Market Watch . April delivery Brent crude dropped 3.2% or $2 to $60.53 per barrel on the ICE Futures exchange of London. A day earlier, the prices had closed at a near two month high, and have gained around 7% based on the most active contract.
The US government-supply data is due Thursday, and it is expected that crude could trade lower.
Crude stock have risen nearly 5 million barrels in the week ended February 13, taking total US inventories to a record hight of 418 million barrels.
Reuters quoted Tariq Zahir, managing member at Tyche Capital Advisors as having said, “We have more supply coming from here with the refinery maintenance season in swing, and that’s prompting some people at least to ask if the market has overstretched itself with the rebound.”
Oil giant, BP PLC said that it might take years to work throughout the oversupply. It said, “The strength of US shale oil and the relative weakness of demand have reduced the market requirement for OPEC crude in recent years.”
March gasoline dropped 1% or 1.7 cents to $1.574 per gallon while March heating oil closed 0.9% lower or 1.8 cents to $1.959 per gallon. March natural gas climbed 2.6% or 7.2 cents to $2.83 per million British thermal units ahead of the US supply update expected Thursday.
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