Oil falls on profit taking after best quarter in seven years

Thu Jun 30, 2016 3:28pm EDT
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By Devika Krishna Kumar

NEW YORK (Reuters) - Oil prices dropped more than 3 percent on Thursday, pressured by returning Nigerian and Canadian crude output from outages and as traders booked profits at the end of the best quarter in seven years.

The market soared more than 25 percent in the second quarter, as part of an 85 percent rebound since hitting 12-year lows early this year, as unplanned production cuts from Canada to Nigeria eased the glut that prompted the worst price rout in a generation.

However, production in Nigeria has risen to about 1.9 million barrels per day (bpd) from 1.6 million, due to repairs and a lack of new major attacks on pipelines in the Delta region, the state oil company said on Monday.

Resurgent Nigerian supply will put pressure on prices, Goldman Sachs said, adding that outages caused by Canadian wildfires would virtually end by September.

OPEC's oil output rose in June to its highest in recent history, a Reuters survey showed, as Nigeria's output partially recovers from militant attacks and Iran and Gulf members boost supplies.

The market was also amid a round of selling ahead of a long holiday weekend in the U.S. and trading liquidity was likely to drop by Thursday afternoon, said Dominick Chirichella, senior partner at the Energy Management Institute.

Brent futures LCOc1 for August delivery, which expired on Thursday, settled down 93 cents, or 1.8 percent, at $49.68 a barrel. The more active Brent contract for September delivery LCOc2 settled at $49.71, down 3.1 percent.

U.S. West Texas Intermediate (WTI) crude CLc1 closed $1.55, or 3.1 percent, lower at $48.33.   Continued...

A view of Mexico's national oil company Pemex's refinery in Salamanca, in Guanajuato state, Mexico, in this February 8, 2016 file photo.     REUTERS/Edgard Garrido