Oil futures finished lower Thursday, pulling back after posting healthy gains over the past two sessions and reaching their highest levels of the year, according to Bloomberg MarketWatch.
Traders weighed mixed fundamental influences for the market, with support from separate data showing China’s oil imports jumped last month and U.S. crude production fell last week, but weekly U.S. crude stockpiles continued to increase.
On the New York Mercantile Exchange, June West Texas Intermediate crude on its first full trading day as a front month contract, fell by $1, or 2.3%, to settle at $43.18 a barrel. Prices for the contract gained more than 7% over the last two trading sessions to settle Wednesday at their best level of the year.
Brent crude declined $1.27, or 2.8%, to $44.53 a barrel on London’s ICE Futures Exchange.
“We’re seeing a lot of volatility in oil prices right now,” said Nico Pantelis, head of research at Secular Investor. “Traders seem to realize that despite all the talks on production freezes, there are still clear risks to the oil price.”
In the U.S., data Wednesday showed that stockpiles of crude increased last week by 2.1 million barrels and continued to hover near record highs. The U.S. Energy Information Administration also said U.S. production of crude fell for the sixth straight week to 8.95 million barrels. Last April, U.S. output peaked at 9.7 million barrels a day.
“Low oil prices have started to put a brake on non-OPEC producers, U.S. [shale] oil in particular,” Fatih Birol, the agency’s executive director, said in a speech Thursday.
Signs of declining production have stoked a more upbeat sentiment in recent weeks. Prices edged higher, even after members of OPEC and non-OPEC producers failed to clinch an output freeze agreement at talks in Qatar on Sunday, buoyed in large part by a three-day oil-worker strike in Kuwait.
May natural gas settled less than 0.1% lower at $2.068 per million British thermal units after briefly trading lower immediately after the supply data. Prices were at $2.075 before the report.