Oil slid to under $52 a barrel today, retreating from the previous session's near 9 per cent surge, as expectations of a continued weakness in near-term energy demand prompted investors to take profit.
Oil posted its largest one-day percentage gain in three weeks yesterday after world leaders at the G20 summit agreed a trillion-dollar deal to combat the deepest economic downturn since the Great Depression, raising hopes that the measures would restore global growth.
US light crude for May delivery fell 82 cents to $51.82 a barrel by 2.45am, paring some of yesterday's gains of $4.25 that lifted the contract to $52.64.
London Brent crude fell 75 cents to $52. "Traders may be wanting to take profits before the release of the US employment report, which has a potential to dampen sentiment," said Toby Hassall, head of research at Commodities Warrants Australia.
The market will keep a keen watch on economic data, including US March unemployment, non-farm and manufacturing payrolls, due to released later in the day, to gauge how the world's largest economy was faring.
A poll showed that the ailing US economy probably continued to bleed jobs at a rapid rate in March, continuing to drive up the jobless rate at a startling pace.
US stocks rallied for a third day yesterday as more data pointed to a stabilising economy and changes to an accounting rule were seen as shoring up the volatile financial sector in the short term.
Data yesterday showed US crude stocks rising again to a fresh 16-year high due to higher imports, while products inventories also surprisingly increased amid lower demand.
Oil registered its largest monthly and quarterly gain since June 2008 earlier this week, thanks to a rally in global stock markets and OPEC's production cuts, which helped lift oil prices by 9.5 per cent in the first quarter, snapping two consecutive quarters of double-digit declines.
But crude prices are still down nearly $100 from the last July's record high as the global economic crisis eroded global oil demand for the first time in 25 years.
Oil demand from developed countries will continue to decline but global demand may revive later this year if the economy improves, a Saudi Arabian oil official said yesterday.
The head of the International Energy Agency also said it was likely to cut its global oil demand forecasts in light of more bleak economic data.
Reuters