Oil prices slip in Asian trade

Oil prices fell in Asia today, unwinding sharp gains in the previous session that was fuelled by hopes that a global supply glut could end soon. US benchmark West Texas Intermediate (WTI) for July delivery eased 15 cents to USD 60.57 while Brent crude forJuly fell 21 cents to USD 66.33 in afternoon trade.

WTI surged USD 1.74 and Brent jumped USD 1.51 yesterday in a second day of rallies after the US Department of Energy (DoE) released its latest petroleum stockpiles report that was largely seen by analysts as bullish.

"Now, the rally seems to have fizzled out probably due to profit-taking as the market re adjusts," Nicholas Teo, market analyst at CMC Markets in Singapore, told AFP. The DoE report on Wednesday showed US crude inventories fell for the third consecutive week, by 2.7 million barrels, much more than analysts expected.

Declining US reserves usually indicate healthy demand in the world's top crude consumer. "We never expected the US inventories numbers to fall that much and last night's price rally is due to traders reacting to this drop," said Teo.

The report also showed US production falling 112,000 barrels a day to 9.26 million. The fall in production levels has raised hopes of an easing in the build-up of global crude reserves, which was a key reason for the collapse in prices of more than 50 percent between June and January. 

Daniel Ang, investment analyst at Phillip Futures in Singapore, said oil prices remain well supported due to a weaker US dollar, as expectations of a US interest rate hike in the near term dissipate.

Minutes from the US Federal Reserve's April policy meeting released Wednesday showed board members are concerned that the world's biggest economy is not yet ready to absorb a rate hike from current record lows.