Oil prices fall on oversupply concerns
Oil prices retreated on concerns the market has risen too much given lofty supplies.
NEW YORK (AFP) - Oil prices retreated Thursday on concerns the market has risen too much given lofty supplies.
US benchmark West Texas Intermediate for June delivery shed 62 cents at $59.88 a barrel on the New York Mercantile Exchange.
European benchmark Brent crude oil for delivery in June lost 22 cents at $66.59 a barrel in London.
Data showing modestly lower US crude inventories amid drilling industry cutbacks have helped push oil prices up about 40 percent since the commodity skidded below $45 a barrel in mid-March.
But US supplies are still high, with oil production above 9.3 million barrels a day, the highest level since the 1970s, analysts said.
"The market s basically beginning to stall," said Gene McGillian, broker and analyst at Tradition Energy.
"If we don t see a better pickup in demand, or signs that production levels are actually starting to come down, the market s going to pull back."
Tim Evans, analyst at Citi Futures, cited data showing an 800,000 barrel a day rise in production from OPEC countries as a drag.
The rise in oil prices since mid-March is "an upward correction in price rather than the beginning of a sustained bull market," Evans said.
Thursday s retreat came despite a fall in the dollar. A lower greenback usually promotes higher oil prices because it makes dollar-denominated oil cheaper for buyers using other currencies.
"Oil s recent price performance has been relatively weak given the decline in the dollar, and in our view this warns that the market is heavy," Evans said.
