UPDATE 3-Oil prices fall on profit taking after hitting 2016 highs

Published 2016-06-09, 07:53 a/m
© Reuters.  UPDATE 3-Oil prices fall on profit taking after hitting 2016 highs
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* U.S. crude inventories fall for third straight week
* Refined product stocks stay high in United States, Asia
* Many traders see $50-60 a barrel oil price as fair value
* Brent forward curve is below $60 until 2021

(Updates throughout, adds quote)
By Ahmad Ghaddar
LONDON, June 9 (Reuters) - Oil prices fell on Thursday as
traders took profits after three sessions of gains, though
prices remained close to their highest this year thanks to a
fall in U.S. crude inventories and supply disruptions.
International Brent crude oil futures LCOc1 traded 46
cents a barrel lower at $52.05 a barrel at 1132 GMT, after
setting a 2016 high of $52.86 a barrel earlier in the session.
U.S. crude CLc1 fell by 34 cents a barrel to $50.89 after also
hitting a new 2016 high at $51.67.
A rebounding U.S. dollar also weighed on prices.
"If you look at the week behind us ... there was support for
commodities from the currency side, the equity side, and the
emerging markets side," chief commodity analyst at SEB Bjarne
Schieldrop said.
"We see some reverse of that now," he added.
A fall in the dollar against a basket of currencies .DXY
to a five-week low on Wednesday boosted oil prices, but the
index recovered on Thursday, rising by 0.33 percent at 1135 GMT.
A weaker dollar makes oil cheaper for holders of other
currencies.
Oil prices also gained ground after data on Wednesday from
the U.S. Energy Information Administration (EIA) showed U.S.
crude stocks last week fell by 3.23 million barrels, while
inventories of gasoline and middle distillates rose. EIA/S
Supply outages in Nigeria and Canada have also kept oil
prices supported.
Consultancy Energy Aspects estimates Canadian output losses
will total 29 million barrels across May and June, "after
adjusting for turnaround work that was underway before the
wildfires broke out, and assuming a pre wildfire utilisation
rate of 85 percent of (the 2015 average)".
The Niger Delta Avengers militant group on Wednesday rejected
an offer of talks with the government to end its attacks on oil
facilities and said it had blown up a Chevron (NYSE:CVX) CVX.N pipeline
site in the Niger Delta.
But some analysts said there are signs that downward
pressure on prices is mounting.
ANZ bank said the rises were "tempered by an increase in
(U.S.) crude production of 10,000 barrels per day to 8.75
million barrels per day and the number of active rigs increasing
by 9 to 325".
Traders also said refined product stocks were building up in
the United States and Asia.
With fundamentals both for and against higher prices, many
traders and analysts say a price of $50-60 per barrel may be
fair value. This is reflected in Brent's forward curve, which
stays within that range until early 2021.
CHART-Brent crude oil forward curve http://tmsnrt.rs/1VNtnDK
TAKE A LOOK-Oil glut persists despite tightening market

COLUMN-Oil market is back in balance: Kemp
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