Oil retreats from 2016 peaks

Oil prices dipped Thursday as traders took profits one day after the market hit 2016 peaks in response to news of falling US production.

Around 1115 GMT, New York’s West Texas Intermediate (WTI) for delivery in June slipped three cents at $45.30 a barrel.

Brent North Sea crude for June nudged nine cents lower to $47.09 a barrel compared with Wednesday’s close.

Prices had surged to 2016 highs for the second straight day Wednesday after the Federal Reserve left interest rates unchanged but appeared less concerned about global conditions, opening the door a crack to a rate hike in June.

New York crude hit $45.62 and Brent North Sea oil struck $47.47 — the highest points since November.

Commercial crude stockpiles jumped by two million barrels in the week to April 22.

That was slightly more than analysts expected and took inventories to their highest level since October 1929 at 540.6 million barrels.

Rising US oil inventories tend to push prices lower because they add to the stubborn global supply glut and indicate weaker demand in the world’s biggest crude-consuming nation.

However, US government data also showed that production dropped by 15,000 barrels per day (bpd) to 8.94 million bpd last week.

“Any sign of production going down is a good sign,” said Peter Lee, a Singapore-based analyst at BMI Research.

Prices have recovered from February lows that saw them hit levels not seen since 2003.