oil prices slide after rally

London: Global oil prices slid Wednesday following a three-day rally as dealers were divided on whether the commodity has bottomed out after a plunge of nearly 60 percent since June. US benchmark West Texas Intermediate (WTI) for delivery in March shed $1.72 to stand at $51.33 a barrel compared with Tuesday’s close.Brent North Sea crude for March slid $1.15 a barrel to trade at $56.76 in London afternoon trade.WTI had soared $3.48 Tuesday to record its highest finish since December 31, while Brent jumped $3.16 to a similar closing peak, as dealers cheered signs that the oil industry is tightening exploration activities to cap a supply glut.Ken Hasegawa, an energy trading manager at Newedge Group in Tokyo, said the crude market was “extremely volatile” after the three-day rally that began Friday saw prices surge nearly 20 percent.”It has become increasingly difficult to discern the direction of the prices of crude oil, but the fundamentals remain unchanged,” Hasegawa told AFP. He added that prices could “fluctuate by increasing up to $10 and falling up to $10” in the short term.Deep cuts in capital spending by major oil companies, including new announcements Tuesday by BP and BG Group, had suggested there would be tighter supplies in the future. The Baker Hughes North America rig count report for the week to January 30 showed a drop of 128 rigs to 1,937. That compared with 2,393 a year ago.Some analysts however remain doubtful that the current oil price rebound will be sustained as supplies still outweigh demand in the immediate term.The oil market has lost more than half its value since June largely owing to a surge in global reserves boosted by robust US shale oil production. The problem was exacerbated in November after OPEC decided to maintain output levels despite plunging prices.The 12-nation Organization of Petroleum Exporting Countries (OPEC) cartel pumps about 30 percent of global crude supplies. (AFP)