Brent crude futures were down 43 cents, or 0.49%, at $86.91 a barrel, while U.S. West Texas Intermediate crude futures dropped 49 cents, or 0.58%, to $83.39
Oil prices inched down on Thursday, pulling back from the previous session’s multi-month highs, with investors taking profits as demand caution remained in focus despite past week’s decline in U.S. inventories.
Brent crude futures were down 43 cents, or 0.49%, at $86.91 a barrel by 0855 GMT, while U.S. West Texas Intermediate crude futures dropped 49 cents, or 0.58%, to $83.39 in trade thinned by the U.S. Independence Day holiday.
In the previous session, Brent added 1.3% to settle at $87.34 for its highest since April 30. West Texas Intermediate, meanwhile, had settled at an 11-week high of $83.88.
Those gains followed a larger than expected drop in U.S. crude stocks. The U.S. Energy Information Administration (EIA) reported a 12.2 million draw in inventories. Analysts polled by Reuters had expected a draw of 680,000 barrels.
Given dollar weakness and a brighter outlook for U.S. fuel demand after the EIA data, Thursday’s price weakness is not expected to last, said PVM analyst Tamas Varga.
The decline in oil prices on Thursday morning is partly attributable to traders taking profits after recent gains, said OANDA analyst Kelvin Wong.
However, German industrial orders dropped unexpectedly in May, adding to signs that a recovery for Europe’s biggest economy remains elusive.
Demand worries were heightened by U.S. data showing that first-time applications for U.S. unemployment benefits increased last week while jobless numbers also rose.
Countering that, weaker economic data could hasten interest rate reductions by the U.S. Fed, analysts said, which could be supportive for oil markets.
Softer U.S. data has already prompted markets to lift the possibility of a September rate cut to 74% from 65%.