Oil drops after strong rally as talk of slower recovery weighs | Reuters

Oil drops after strong rally as talk of slower recovery weighs | Reuters

Oil prices fell on Thursday, giving up some of the recent strong gains on expectations of slower economic recovery and speculation that the market’s strength could tempt producers like Saudi Arabia to reduce output by less.

Brent crude fell 35 cents, or 0.6%, to $61.12 a barrel, as of 0805 GMT, after touching its highest since January 2020 on Wednesday.

The market has been driven higher as the Organisation of Petroleum Exporting Countries and its allies, known as OPEC+, reduced output and coronavirus vaccine rollouts fired up hopes of a recovery in demand.

U.S. West Texas Intermediate crude futures slid 34 cents, or 0.6%, to $58.34 a barrel.

“Benchmark crude oil futures fell...as investors tapped the brakes on the run in crude prices after taking in tepid U.S. inflation data and comments from the Federal Reserve chief affirming the outlook for a slow recovery,” Avtar Sandu, senior commodities manager at Phillip Futures, wrote in a note.