LONDON: Oil prices slipped away from five-month highs in early Asian trading on Thursday as Japanese factory output weakened for the second straight month.
Japanese industrial output fell 0.3 percent in March adding to mounting evidence of an export-driven economy struggling to regain momentum amid slowing global growth.
Brent crude futures dropped 26 cents from their last settlement to $65.58 a barrel by 0307 GMT. U.S. WTI crude was virtually flat at $58.67 a barrel.
The drops followed a session in which prices hit five-month highs after the first crude stock draw in almost half a year at the U.S. Cushing hub.
“Brent and WTI prices closed at the highest level in nearly five months as U.S. crude oil inventories rose by just 1.9 million barrels (compared to more than 5.5 million barrels the previous week),” ANZ bank said on Thursday.
“WTI prices outperformed Brent as crude oil stocks at key US storage hub Cushing fell for the first time in five months,” it added.
Despite prices hovering close to half-year highs, analysts warned against investment into certain oil sectors, even if prices continued to rise.
“We advise investors to avoid companies that have large business exposure to jackup rigs,” Nomura said on Thursday.
“We believe the global jackup rig oversupply is only mid-way
