Oil futures decline amid profit-taking ahead of U.S. supply report

Investing.com - Crude oil futures declined on Wednesday, as investors cashed out of the market to lock in gains from a recent rally.

On the New York Mercantile Exchange, crude oil for delivery in April slumped 60 cents, or 1.11%, to trade at $53.69 a barrel during European morning hours.

A day earlier, New York-traded oil futures hit $54.92, the strongest level since February 3, before settling at $54.29, up 62 cents, or 1.16%.

New York-traded oil futures are up almost 16% over the past three weeks amid indications U.S. producers are pulling back on new production in response to low prices.

However, prices are still down approximately 50% from a recent peak of $107.50 hit in June.

Market participants looked ahead to fresh weekly information on U.S. stockpiles of crude and refined products to gauge the strength of demand in the world’s largest oil consumer.

The American Petroleum Institute will release its inventories report later in the day, while Thursday’s government report could show crude stockpiles rose by 3.1 million barrels in the week ended February 13.

The report comes out one day later than usual due to Monday's Presidents Day holiday in the U.S.

Elsewhere, on the ICE Futures Exchange in London, Brent oil for April delivery dropped 77 cents, or 1.22%, to trade at $61.77 a barrel.

The April Brent contract touched $63.00 a barrel on Tuesday, the most since December 18, before ending at $62.53, up $1.13, or 1.84%.

London-traded Brent prices have sky-rocketed nearly 22% over the past three weeks, as some investors bet that a bottom had been reached after a seven-month long rout.

Brent prices are still down approximately 45% since June, when futures climbed near $116.

Oil prices have fallen sharply in recent months as the Organization of Petroleum Exporting Countries resisted calls to cut output, while the U.S. pumped at the fastest pace in more than three decades, creating a glut in global supplies.

Meanwhile, market sentiment remained supported amid hopes that a compromise between Greece and its European partners would eventually be reached.

According to sources familiar with the matter, Athens intends to ask for a six-month extension of its loan agreement with its international lenders later in the day, easing concerns over the country's future in the euro zone.

Greece’s current €240 billion bailout is due to expire at the end of the month, fuelling worries the country will run out of money.