SINGAPORE: Oil prices fell in Asian trade Thursday following US and European indications of support for releasing strategic oil reserves, analysts said.
New York's main contract, West Texas Intermediate crude for delivery in May, shed 15 cents to $105.26 per barrel while Brent North Sea crude for May settlement was down 16 cents at $124.00.
“Crude prices weakened slightly on expectations that the US and several European countries would support a release of oil from strategic stocks,” said Sanjeev Gupta, head of the Asia-Pacific oil and gas practice at Ernst and Young.
France's Energy Minister Eric Besson on Wednesday gave the clearest indication so far that it was ready to release some of its reserves to stave off prices, which have spiked in recent weeks.
“It was the United States that requested this, and France greeted the idea favourably. We are now waiting for the opinion of the International Energy Agency (IEA),” Besson said on Wednesday after a cabinet meeting.
Government spokeswoman and budget minister Valerie Pecresse said France was working with the United States and Britain to persuade the IEA to permit them to tap their reserves to “counter speculation on global energy markets”.
Meanwhile, an unexpected jump in US crude inventories was also weighing on the market, analysts said.
The US Energy Information Administration on Wednesday said crude inventories in the world' top oil consuming economy rose 7.1 million barrels last week -- three times the amount expected.
The build up of stockpiles reignited concerns about slowing energy demand in the country.