Oil prices pulled back Thursday morning, giving up a few of the prior day's gains as some investors cashed in on the week's price rise.
Brent crude, the global benchmark, fell 1.22% to $57.43 a barrel on London's Intercontinental Exchange. On the New York Mercantile Exchange, West Texas Intermediate futures were trading down 1.36% at $51.55 a barrel.
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"I don't think there is any particular trigger," said Harry Tchilinguirian, global head of commodity markets strategy at BNP Paribas. "This move is more symptomatic of something we have been seeing over the past week--the market is having trouble moving higher."
Mr. Tchilinguirian said every time crude prices rally there is an "opportunity for profit taking," as well as hedging, by U.S. shale producers that "tends to keep prices in check."
Prices have been largely supported in the last week by rising political tensions in the Middle East.
"Geopolitical risk has returned to the oil market, with concerns over the impact fighting between Iraqi and Kurdish forces will have on oil supply," analysts at Dutch bank ING Group wrote in a note Thursday. "Also there is increased uncertainty over the Iranian nuclear deal, and what this could mean for oil supply."
Clashes between Iraqi government forces and troops from the northern, semiautonomous Kurdish region have led to temporary shutdowns in crude production from the oil-rich Kirkuk province.
Prices have also been boosted by concerns the U.S. could impose fresh sanctions on Iran, limiting its oil export capacity. President Donald Trump last week refused to certify Iran's compliance with a 2015 international agreement to curb the Islamic Republic's nuclear program in exchange for economic sanctions relief.
At the same time, there were fresh signs this week that OPEC could extend its production cutting deal through to the end of next year. Algeria on Wednesday became the latest member of the Organization of the Petroleum Exporting Countries to back an extension of output cuts.
"I think it is desirable and probable to conduct an extension," Abdelmoumen Ould Kaddour, Chief Executive of Algeria's state oil company, told The Wall Street Journal from the sidelines of the Oil and Money conference in London.
OPEC and 10 producers outside the cartel, including Russia, first agreed late last year to cap their production at around 1.8 million barrels a day lower than peak October 2016 levels, with the aim of alleviating global oversupply and boosting prices. In May, the deal was extended through March 2018. OPEC is set to officially debate an extension at its next meeting in Vienna in November.
Also on Wednesday, the U.S. Energy Information Administration reported that crude inventories fell by 5.7 million barrels last week, more than the 3.2 million barrels that analysts were expecting, according to a survey by the Journal.
Among refined products, Nymex reformulated gasoline blendstock--the benchmark gasoline contract--was up 0.79%, at $1.64 a gallon. ICE gasoil, a benchmark for diesel fuel, changed hands at $530.25 a metric ton, down 0.52% from the previous settlement.
Benoit Faucon contributed to this article.
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(END) Dow Jones Newswires
October 19, 2017 07:09 ET (11:09 GMT)