LONDON: Oil prices slid Thursday on profit-taking, after a strong rally the previous day on news of sliding crude inventories in key consumer the United States, traders said.
Brent North Sea crude for delivery in April fell $1.01 to $45.11 a barrel in late morning London trade.
New York s main futures contract, light sweet crude for delivery in April, handed back 87 cents to $44.51 a barrel.
There could be some limited profit-taking at these levels, said VTB Capital analyst Andrey Kryuchenkov.
The market had bounced higher Wednesday on news of sliding American crude oil reserves, which indicated solid demand, traders said.
The US government s Energy Information Administration (EIA) said crude oil stockpiles sank 700,000 barrels in the week ending February 27. Market expectations had been for a gain of one million barrels.
Crude futures rallied last night, gaining ground after yet another supportive weekly report from the EIA, Kryuchenkov added.
There was also encouraging news on reserves of gasoline or petrol, which is in focus ahead of the peak-demand US holiday driving season starting in May.
Improving gasoline demand helped to boost production last week. In fact, gasoline demand in the past four weeks alone was 2.2 percent higher than last year, he added.
However, the oil market was also weighed down Thursday by disappointment over an economic stimulus plan in China – the second biggest energy consumer after the United States.
Premier Wen Jiabao said Thursday that China was facing unprecedented challenges from the global crisis but he was confident the country would still achieve economic growth of about eight percent this year.
The stimulus news may not live up to market expectations, warned David Moore, commodity strategist at Commonwealth Bank of Australia, cited by Dow Jones Newswires.
In his annual state of the nation address to open parliament, Wen gave the most detailed blueprint yet of a four-trillion-yuan ($585 billion) stimulus plan aimed at steering China through the downturn.
The premier acknowledged the Chinese economy, the third-biggest in the world, was hurting and the climate was not expected to get better soon in the face of a global recession that has weakened demand for Chinese goods.
We face unprecedented difficulties and challenges. The global financial crisis continues to spread and get worse, Wen told the 3,000 delegates gathered for the Communist Party s showpiece political event of the year.
But Wen said China s economy was still expected to grow by about 8.0 percent this year – a rate officials have stressed is needed to prevent social unrest triggered by wide-scale unemployment. -AFP
