Oil down after three-day rally; dollar rise sparks profit-taking

Thu Jun 9, 2016 2:58pm EDT
 
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By Barani Krishnan

NEW YORK (Reuters) - Oil prices settled down on Thursday, snapping a three-day rally after notching another 2016 high, as a strong dollar sparked profit-taking in crude futures by investors.

Continuous threats by militants against Nigeria's oil industry and fear of more security incidents that could hit supplies worldwide, however, limited losses in crude.

Brent crude oil futures LCOc1 settled down 56 cents at $51.95 a barrel, after falling nearly $1 earlier. It hit a 2016 high of $52.86 during the session.

U.S. crude's West Texas Intermediate (WTI) futures CLc1 fell 67 cents to settle at $50.56, after dropping $1 at the session low. WTI's intraday peak was $51.67, the highest for this year.

Profit-taking emerged in crude as the dollar index .DXY rose nearly half a percent, the most in three weeks, from jittery global financial markets that sent investors toward safe haven currencies. A stronger dollar makes greenback-denominated oil less attractive to holders of the euro and other currencies.

"So far this looks like a modest technical correction following three days of gains, rather than a major reversal," said Tim Evans, energy futures specialist at Citi Futures in New York.

Crude futures have almost doubled since the 13-year lows of $27 for Brent and $26 for WTI in the first quarter.

Some analysts anticipate headwinds for oil in coming weeks as Canadian supplies return after last month's wildfires in Alberta's oil sands region and other oil imports grow to slow use in U.S. crude stockpiles.   Continued...

 
A worker looks at a pump jack at an oil field Buzovyazovskoye owned by Bashneft company north from Ufa, Bashkortostan, Russia, July 11, 2015. REUTERS/Sergei Karpukhin/File Photo