Oil fell below $67 a barrel today, pulling back from a nearly 3 percent surge to a three-week high in the previous session on positive US corporate earnings.
Strong results from companies like 3M & Co and AT&T and a rise in US existing home sale in June gave a boost to the idea that the US economy is on the road to recovery, but late results from Microsoft and Amazon were less bullish.
Hopes that a recovery in the world's top energy consumer would spark a rebound in oil demand have pushed crude prices up 14 per cent since a two-month low hit in the middle of July.
However, yesterday's rise in US jobless claims could foreshadow a lethargic recovery, with the release of the final July Reuters/University of Michigan consumer sentiment index later on Friday to provide the next clues.
US crude oil for September delivery sank 51 cents to $66.65 a barrel by 3.15am, after surging $1.76 to settle at $67.16 a barrel on Thursday, the highest since July 1st. Crude is on track for a rise of about 5 percent so far this week.
London Brent crude fell 45 cents to $68.80.
“The market is just undergoing a correction after the jump in prices overnight, but the underlying tone is still pretty positive, with the strong equity market and corporate earnings in good shape,” said Tetsu Emori, fund manager at Tokyo-based Astmax Co Ltd.