Oil prices give up three-week highs as dollar powers up

Oil prices declined in European trade on Thursday for the first time in four days off three-week highs on profit-taking while the dollar powers up against major rivals. 

The decline comes following Russian statements that hurt chances of more production cuts by OPEC+ next week. 

Such developments overshadowed recent data that showed a collapse in US crude stocks last week in a strong sign of demand.

Global Oil Prices

US crude fell 1.9% to $72.78 a barrel, while Brent fell 1.7% to $76.82 a barrel, with a session-high at $78.34. 

US crude is up 0.6% on Wednesday on track for the third profit in a row, hitting three-week highs at $74.69 a barrel, while Brent added 0.8% to $78.46 a barrel, the highest since May 2. 

Such gains were registered after Saudi Arabia's energy minister warned that short sellers "should be careful of pain".

traders took the statement as a signal OPEC+ might impose another production cut at the next June meeting.

The Dollar

The dollar index rose 0.3% on Thursday for the fourth straight session, hitting two-month highs at 104.18 against a basket of major rivals. 

A stronger dollar weighs ion dollar-denominated commodities and makes them costlier to holders of other currencies.

Dollar is riding the wave of strong US data including GDP growth data, in addition to bullish remarks by Fed officials, which bolstered the case for a 0.25% rate hike in June. 

Russian Remarks

Russian Vice Prime Minister Alexander Novak dismissed prospects of fresh OPEC+ production cuts next week, and expecting no such new steps by the oil cartel. 

US Stocks

The Energy Information Administration reported a steeo drop of 12.5 million barrels in US crude stocks last week, while analysts expected an increase of 1.9 million barrels.

Gasoline stocks are now down 2.1 million barrels to 216.3 million barrels, while distillate stocks are down 600 thousand barrels to 105.7 million barrels.

US Production 

The EIA also reported an increase of 100 thousand bpd in US output last week to a total of 12.3 million bpd, cementing the US's status as the world's stop oil producer.