Oil ends strong rally, hopes for demand recovery cap losses

Oil prices dropped on Thursday, losing some of the recent gains on profit-taking and speculation that the market’s strength could lead Saudi Arabia to cancel more production cuts.

Brent crude slid 0.7%, or 40 cents, at $61.07 per barrel after hitting its highest level since January 2020 on Wednesday. U.S. crude dropped 0.6%, or 35 cents, at $58.33 per barrel. 

Crude stocks were down for a third consecutive week last week. It dropped 6.6 million barrels to 469 million barrels, its lowest since March. 

Brent rose in the last nine sessions, its longest rally since January 2019. Wednesday marked the eighth consecutive day of gains for U.S. crude. 

Crude prices rose since November as governments began COVID-19 vaccination drives and released massive stimulus packages to support economic activity. 

Saudi Arabia is reducing output in February and March, adding to cuts already agreed by OPEC and its allies.