U.S. West Texas Intermediate (WTI) futures were down 2 cents at $45.31 a barrel.
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Nymex oil prices had pared gains immediately after U.S. government data showed that American crude supplies had risen for a third successive week.
SINGAPORE, April 28 (Reuters) – Crude futures pulled back from 2016 highs early on Thursday as traders locked in profits after April’s sharp rally, but analysts said falling US production and strong investor appetite could push prices higher.
“The issue is that we haven’t seen price rallies… correlate with fundamentals”, said Hamza Khan, senior commodity strategist at ING.
The API report is a precursor to official inventory data due on Wednesday from the U.S. Energy Information Administration.
Investors should take comfort from a relatively market neutral Federal Open Market Committee statement and the improvement in fundamental will likely encourage traders to beef up their already bullish positions in coming days, said ANZ Research.
“With crude inventories building and the Saudis still pumping at record levels, we feel the recent run-up has been mainly fuelled by the weakness on the dollar”, said Tariq Zahir, trader and portfolio manager at Tyche Capital Advisors in NY. The prices are ~16% less than the same period in 2015.
Dollar-denominated oil has become more attractive for buyers of rival currencies despite lingering concerns about a global supply glut, thanks to the USA unit falling heavily, particularly against the yen. US crude was up 42 cents at $46.45 a barrel, with both contracts hitting 2016 highs earlier in the session.
ExxonMobil reported Friday a 63 percent slide in first quarter profits, following low crude oil prices and weak refining margins. The kingdom has invested tens of billions of dollars in driving high-cost producers (mostly in the United States) to shut down production, and the effort has paid off. But if Brent rises much past $50 a barrel, the Saudis’ leverage diminishes, unless it also raises production to drive prices down again.
Nymex reformulated gasoline blendstock for May-the benchmark gasoline contract-fell 37 points to $1.5771 a gallon, while May diesel traded at $1.3778, 17 points lower.
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Christian Berthelsen contributed to this article.
