Oil Prices Slide

Oil Prices SlideOil Prices Slide

Benchmark crude oil prices fell on Wednesday, but remained near multi-week highs as investors weighed up how successful potential talks among producers to rein in ballooning oversupply would be.

Brent crude futures were down 9 cents at $49.14 a barrel, while US West Texas Intermediate crude was at $46.12 a barrel, down 46 cents on the day, CNBC reported.

Traders told CNBC prices slipped after WTI hit a technical peak above $46 a barrel. The drop came after US crude breached its 50-day moving average of $46.43.

Traders also said weekly the US Energy Information Administration oil inventory data due on Wednesday could show the glut in crude and oil products supplies had widened and this expectation may have triggered Wednesday's profit-taking.

Data from industry group the American Petroleum Institute indicated a weekly gasoline stock build that offset a draw in crude inventories, putting further pressure on oil ahead of the government release.

Prices have risen by nearly 20% in just two weeks to their highest since early July, after speculation surfaced that top producers within and outside of OPEC could finally reach a deal on freezing output.

"The market is totally dominated by short speculators facing OPEC talk," SEB commodities strategist, Bjarne Schieldrop, said.

"The 'pain trade' is probably still to the upside. And now we are a dollar away from $50 so it seems almost unavoidable that we're at least going to take that (level) out," he said.

The fight for market share among some OPEC producers has made market watchers doubtful that talks to rein in oversupply by freezing output levels would be successful.

Saudi Arabia is sending signals that it could boost its crude oil supplies in August to a new record level, overtaking Russia, the world's top oil producer, as it gets ready for tough talks next month for a global output freeze pact.