Oil retreats from six-week high to below $72
U.S. crude prices fell below $72 on Thursday on oversupply worries, retreating after hitting the highest level since late June, and North Sea Brent crude briefly touched a record for 2009.
A 1 percent rally in European shares <.EU> sparked the initial jump but persistent concerns about surplus stocks in the world's largest energy consumers cut early gains.
U.S. crude fell 16 cents to $71.81 a barrel by 1307 GMT after touching a six-week high of $72.42 earlier in the day.
But ICE Brent crude looked set to rise for the sixth day and were 18 cents higher at $75.69 a barrel after earlier hitting a new 2009 high of $76.
Equities are taking the lead. Currently the market is driven by an optimistic view on the global economic recovery and when that mood turns around there is potential for a retreat in oil prices, said analyst Andy Sommer at Switzerland-based utility EGL adding, There is still a big supply overhang.
U.S. crude inventories rose by a much-higher-than-expected 1.7 million barrels in the week to July 31, according to data from the U.S. Energy Information Administration on Wednesday.
Optimism about the possibility of a turnaround in the global economy has helped to lift oil prices from lows of less than $33 a barrel last December.
But oil prices did not respond to positive news of a sharper-than-expected 38,000 drop in new claims for U.S. jobless benefits.
Analysts said that non-farm payroll figures coming out of the United States on Friday would provide further direction.
BRENT STRENGTH
The premium of ICE Brent futures to U.S. crude increased on Thursday and was seen as high as $3.99 a barrel, helped by summer maintenance in the North Sea and high U.S. inventories at Cushing in Oklahoma.
Analysts said that gains in Brent were also due to a lower perceived regulatory risk on ICE following calls for greater scrutiny of commodities trading in the United States.
Maybe talk of tightening regulation from the Commodity Futures Trading Commission has helped widen the spread. But the main factors are fundamental, said Sommer.
The CFTC, which oversees regulated futures exchanges, held its third and final hearing on Wednesday into whether it should limit how many futures contracts hedge funds, investment banks and other speculators can control to help limit big movements in energy prices.
The UK Financial Services Authority and the UK Treasury also met with oil industry representatives to discuss market transparency and regulation, but issued no statement.
(Additional reporting by Sambit Mohanty, Editing by William Hardy)
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