US crude futures dropped more than 0.5% to less than $79 a barrel today, extending the previous session's losses away from a one-year peak following a rise in US crude oil inventories.
NYMEX crude for the new front month December fell $0.30 to $78.82 a barrel by 1.11am EDT, after the American Petroleum Institute said yesterday that crude stocks rose 3.8 million barrels, far more than the 1.8 million-barrel build forecast in a Reuters poll.
Yesterday the November contract hit $80.05, a 12-month high for the front month on a continuation basis. Brent crude lost $0.22 to reach $77.02.
But pullbacks should be seen as buying opportunities as crude heads back to $100 a barrel, Richard Ross, global technical strategist at Auerbach Grayson in New York, told Reuters.
The persistent weakness in the US dollar, global strength in equities, absence of overhead resistance and mounting evidence of real economic recovery pointed to a bullish outlook for crude, he said.
That view was echoed by BP's chief economist, who also predicts strong prices in the coming months, driven by expectations of growing demand and a relatively high level of Opec output discipline.