OIL EXTENDS LOSSES ON DEMAND CONCERNS
Oil prices extended losses on Thursday, pulling further away from recent 18-month peaks after news of a supply build-up in the United States, which is the world's biggest energy consuming nation, Agence France Presse reported.
New York's main contract, light sweet crude for delivery in May, dropped 60 cents to 85.28 dollars a barrel, after spiking above 87 dollars on Tuesday.
Elsewhere on Thursday, London's Brent North Sea crude for May fell 55 cents to 85.04 dollars per barrel.
'The market had gotten ahead of itself when it marched towards 87 dollars,' Jason Feer, vice president with energy market analysts Argus Media, told AFP.
'There are no physical reasons why prices should be moving so high,' he added.
Investors were taking a step back from the notion that recent positive economic data would spur stronger oil demand after a government report on supplies showed a larger-than-expected increase in crude stocks, Feer said.
'Even if people are justified in being so optimistic (about oil demand), there's an awful lot of spare oil production capacity and refining capacity in the world,' said Freer.
The US Energy Information Administration said on Wednesday that American oil inventories rose two million barrels in the week ending April 2.
That was far more than forecasts for a gain of 1.4 million barrels.
Gasoline stockpiles tumbled 2.5 million barrels, while distillates — which include diesel and heating fuel — rose 1.1 million barrels.
Crude futures briefly hit an 18-month high on Tuesday, as the market found support from a batch of encouraging economic indicators in the United States.