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International benchmark Brent futures were trading at $50.50 per
barrel at 0840 GMT (4.40 a.m. ET), down 39 cents from their last
close. Brent earlier hit $51.22, its highest since June 22.
U.S. West Texas Intermediate (WTI) crude futures were down 20
cents at $48.02 a barrel after reaching $48.75, their highest
since July 5.
"We would argue that improved fundamentals are not a key reason
for the recent price bounce," Morgan Stanley said in a note.
"Crude oil demand is anemic, gasoline demand has decelerated
globally, and China crude oil imports are likely to decelerate
(in the second half of 2016)," the bank said, adding that supply
appears set to surprise to the upside in a number of countries.
Iraq has resumed pumping oil from fields operated by the
state-run North Oil Company via a Kurdish pipeline to Turkey for
the first time since March and at a rate of around 70,000
barrels per day.
Libya's National Oil Corporation began to load a tanker with
crude from storage tanks at the country's eastern Zueitina port
to move to a local refinery.
While the port, which has been shut since November, remained
closed for exports, the loading is a sign that a deal between
guards at the facility and the U.N.-backed Government of
National Accord in Tripoli is moving forward.
A stronger dollar also weighed on prices as it rose 0.34 percent
against a basket of currencies.
Gains in the dollar make dollar-denominated oil less attractive
to holders of other currencies.
Oil prices rallied sharply in recent weeks after the
announcement of planned talks in Algeria next month between the
Organization of the Petroleum Exporting Countries and other
major producers including Russia.
However, analysts and traders warned the rally was overblown,
saying the talks were unlikely to lead to reduced supply.
Nigerian oil minister Emmanuel Ibe Kachikwu said on Thursday
that while a cut in OPEC production is unlikely, there is hope
that the Algeria meeting could help shore up crude prices.
(Additional reporting by Mark Tay in Singapore; Editing by Dale
Hudson)
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