Oil falls, talk of SPR release encourages profit-taking

Thu Mar 29, 2012 4:13pm EDT
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By Matthew Robinson

NEW YORK (Reuters) - Oil prices fell for a third straight session on Thursday, snapping key technical support after growing talk of a release of strategic petroleum reserves (SPR) by consumer nations spurred profit-taking.

Even with the day's losses for both contracts, Brent crude futures remained on pace to post a 14 percent gain for the quarter, with U.S. crude on track for a 4 percent rise.

Traders took profits from oil's bull run as the United States, Britain and France consider releasing emergency stockpiles in hopes of bringing down high fuel prices that have caused economic and political fallout.

Economic concerns mounted after data showed a higher-than-expected number of Americans filed U.S. jobless claims, weighing on stock and crude markets.

"I think part of it is today's economic data," said Richard Ilczyszyn, chief market strategist and founder of iitrader.com LLC in Chicago. "I think traders are very sensitive to booking profits to have that 1 to 2 percent gain for the month."

"We've been talking about the SPR here, France and the UK, that could be weighing on some investors."

Losses accelerated after U.S. crude broke through its 50-day moving average in afternoon trade, dragging down prices for international benchmark Brent as well.

Brent crude futures fell $1.77 to settle at $122.39 a barrel, extending losses after dropping 1.09 percent the previous session.   Continued...

A driver pumps petrol into his car at a petrol station in Brussels March 8, 2011. REUTERS/Yves Herman