Oil prices fell on Thursday, after touching 26 month highs as reports emerged that US inventory has witnessed steep declines.
U.S. West Texas Intermediate crude (WTI) dipped 7 cents, or 0.2 percent, to $52.06 a barrel by 0533 GMT after rising 26 cents in the previous session to just below 5-month highs.
Brent was down 11 cents, or 0.2 percent, at $57.79 a barrel, slipping further away from Tuesday's more than two-year high of $59.49 following a near 1 percent fall in the previous session.
US inventories fell by more than 1.8 million barrels against expectation of a 3.4 million barrel build up in inventories. Crude has garnered much support as closed refineries after Hurricane Harvey resume production, surprise drop in distillate stocks prompted an uptick in global oil prices. While data continues to present a mixed picture, the demand surge has been helping oil prices rebound.
The rebound has been more than welcoming, in the given scenario it would be safe to assume that oil is moving towards a $60 a barrel, which analysts’ term as a safe bet to make by the year end. International Energy Agency raised its future demand for oil from 1.5 million barrels per day to 1.6 million barrels per day, expecting a stronger demand from growth in Europe and US.
On the flipside, production continues to rise form US Shale rigs, raising deep concerns for OPEC and others’ efforts to curb oil glut and raise oil prices.